With India’s policy makers emphasizing and working towards developing adequate infrastructure, the Indian real estate sector has turned out to be a large employment generator. Since the early 1990s, India has liberalized its foreign trade and investment policies, resulting in huge capital inflows in the form of foreign direct investment (FDI).
Until 2005, foreign investors had to seek permission from the Foreign Investment Promotion Board and/or the Reserve Bank of India to set up real estate development and construction projects. In 2005, the Indian government allowed FDI of up to 100% in the real estate sector through automatic route, without prior government permission. The real estate sector saw a massive revolution with respect to development and infrastructure, and today real estate is a most alluring sector for investment.
Still, some vagueness and indistinctness exists with regard to FDI in the sector.
Amitabh Chaturvedi is the managing partner of Mine & Young, where Utkarsh Tewari is a partner. Since 2005, Mine & Young has handled over US$500 million in FDI in real estate in India for projects with a capital outlay of over US$4 billion.
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