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| Real estate redefinition to hit FDI Sun, 06 Mar 2011 19:30:33 GMT |
| NEW DELHI: The government plans to widen the definition of real estate in its foreign direct investment (FDI) policy to include consultants, advisers , valuers and brokers, a move experts say could restrict entry of foreign players in these specialized services. The department of industrial policy and promotion, or DIPP, has circulated a draft note for comments of various ministries on the proposal. "The idea is to explicitly state what all services does the definition (of real estate) cover," a government official privy to the discussions said. The wider definition is likely to be included in the half-yearly update of FDI policy due to be released by the end of this month. The current FDI policy lacks clarity on several issues, including what constitutes real estate. The policy prohibits FDI in real estate business but allows 100% foreign investment in construction and housing development. In construction and housing, the FDI is subject to several riders including a three-year lock-in period, minimum capitalisation of $10 million for wholly-owned subsidiaries and $5 million in case of joint ventures. The government hopes to clear the air by defining the scope of the real estate business. According to the proposal, consultancy or advisory services related to locational space and property issues of any kind will be included in the real estate business. |
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