DIPP may relax FDI norms for housing

The Department of Industrial Policy and Promotion (DIPP) is looking at relaxing foreign direct investment (FDI) norms for the housing sector, including easing the three-year lock-in period, to attract foreign investment.

According to the current FDI policy, the lock-in period of three years applies to every tranche of investment brought in by a foreign player from the date of receipt or from the date of 'completion' of minimum capitalisation whichever is later.

The proposal to ease the FDI guidelines for the sector was mooted by the ministry of housing and urban poverty alleviation.

Apart from seeking relaxation in the three-year lock-in period, the ministry has said the minimum capitalisation should be $5 million instead of the present $10 million for wholly-owned subsidiaries.

The ministry has also suggested a cut in the minimum built-up area of 50,000 sq mts in case of construction development projects to 20,000 sq mts of carpet area.

"DIPP is looking at it (all the demands) favourably. There is a need to define the word 'completion' in the current policy on the matter of reducing three year lock-in period," a top official of the commerce and industry ministry said.

The main objective of relaxing the provisions is to attract more FDI and provide houses at affordable prices to the people, the official said.

With inputs from PTI