India Is currently reviewing its foreign direct investment policy to boost the real estate sector. Currently it allows 100% FDI in projects under development including residential and commercial buildings, townships however it is exempted from investing in farm house projects and real estate business. This move if implemented may give a sigh of relief to builders across India who is sitting on huge unsold inventory. This may help them tide over the current liquidity crisis faced by the real estate industry and also help sustaining the property price levels.
The DIPP (Department of promotion of industry and internal trade) is working towards attracting investment to various sectors across India. Now there are only limited sectors to open FDI and housing sector is one among them. This would also help bring in transparency and help boost confidence among buyers who are looking to buy properties in India.
India, however, prohibits FDI in the real estate business or construction of farm houses. FDI in construction development rose to $617 million in FY20 from $213 million in FY19.
The industry has been asking for incentives to boost the sector and one among them was to extend FDI in real estate projects. There are lots of foreign players who are keen to invest in Indian real estate market.