The Government has issued the Press Note No. 10 on 3rd December, 2014, amending the FDI policy regarding Construction Development Sector. Amended policy includes easing of area restriction norms, reduction of minimum capitalization and easy exit from project. Further, in order to give boost to low cost affordable housing, it has been provided that conditions of area restriction and minimum capitalization will not apply to cases committing 30% of the project cost towards affordable housing.

Relaxation of FDI norms are expected to result in enhanced inflows into the Construction Development sector consequent to easing of sectoral conditions and clarification of terms used in the Policy. It is likely to attract investments in new areas and encourage development of plots for serviced housing given the shortage of land in and around urban agglomerations as well as the high cost of land. The measure is also expected to result in creation of much needed low cost affordable housing in the country and development of smart cities.

This information was given by the Minister of State (Independent Charge) in the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Rajya Sabha today.

Relaxed FDI norms in construction sector expand eligibility and simplify capital and exit requirements, encouraging affordable housing investment. Amendment to the FDI policy for the Construction Development Sector eases area restriction norms, reduces minimum capitalization requirements and simplifies exit provisions, and exempts projects allocating thirty percent of project cost to affordable housing from area and capitalization conditions to encourage investment in serviced plots and low cost housing.