The impotent central government has finally got some guts to stand up, but against its own businessmen as it will not not allow real estate companies, which have accepted foreign direct investment (FDI) to continue keeping projects that are not compliant with new FDI norms.
As per the norms, FDI is allowed in real estate projects involving housing, Information Technology (IT) parks, hotels & resorts and integrated townships. Projects like shopping malls, etc are not allowed to accept FDI. In this wake, developers that have both types of projects and if they are accepting FDI, they may have to let go the projects that are not in the FDI permissible list.
The issue was taken up by the Foreign Investment Promotion Board (FIPB) and has been referred to Department of Industrial Policy and Promotion (DIPP). One of options for realtors may be to set up n special purpose vehicle (SPV), which can manage the projects where FDI is not allowed. The matter is now pending with DIPP and a decision is expected soon.
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