FDI Policy

FDI Policy

Construction – Development projects (which include development of townships, construction of residential/commercial premises, road or bridges, hotels, resorts, hospitals, educational institutes, recreational facilities, city and regional level infrastructure, townships) – 100% FDI through automatic route is permitted. The conditions under this sector are:

  • No minimum land area requirement in case of development of serviced plots.
  • In case of construction-development projects, minimum floor area of 20,000 sq. mts.
  • The investee company should bring in a minimum FDI of USD 5 Million within six months of commencement of the project. The commencement of the project will be the date of approval of the building plan/layout plan by the relevant statuary authority. Subsequent tranches of FDI can be brought within the period of 10 years from the commencement of the project or before the completion of project, which ever expires earlier.
  • The investor will be permitted to exit on completion of the project or after the development of trunk infrastructure i.e., roads, water supply, street lighting, drainage and sewerage.
  • The government may, in view of facts and circumstances of a case permit repatriation FDI or transfer of stake by one Non-Resident investor to another Non-Resident investor before the completion of project. These proposals will be considered by FIPB on case to case basis.
  • The Indian investee company will be permitted to sell only developed plots. (plots where trunk infrastructure is available).
  • It is clarified that 100% FDI under automatic route is permitted in completed projects for operations and management of townships, malls/shopping complexes and business constructions.
  • FDI is not allowed in the real estate business or construction of a farmhouse and trading in transferable development rights (TDR).

100% FDI is allowed under the automatic route for urban infrastructure areas like urban transport, water supply, sewerage and sewage treatment subject to relevant rules and regulations.

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