Consolidated fdi Policy
Construction development: townships, housing, BUILT-UP infrastructure
Construction-development projects include development of townships, construction ofresidential/commercial premises, roads or bridges,hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional level infrastructure, townships Each phase of the construction development project would be considered as a separate projectfor the purposes of FDI policy. Investment will be subject to the following conditions: (A) (i) The investor will be permitted to exit on completion of the project or after development oftrunk infrastructure i.e. roads, water supply, street lighting, drainage and sewerage. (ii) Notwithstanding anything contained at (A) (i) above, a foreign investor will be permittedto exit and repatriate foreign investment before the completion of project under automaticroute, provided that a lockin-period of three years, calculated with reference to eachtranche of foreign investment that has been completed. Further, transfer of stake from onenon-resident to another non-resident, without repatriation of investment will neither besubject to any lock-in period nor to any government approval. (B) The project shall conform to the norms and standards, including land use requirements andprovision of community amenities and common facilities, as laid down in the applicable buildingcontrol regulations, bye-laws, rules, and other regulations of the Stategovernment/municipal/ Local Body concerned. (C) The Indian investee company will be permitted to sell only developed plots. For the purposesof this policy, “developed plots” will mean plots where trunk infrastructure i.e. roads, water supply,street lighting, drainage and sewerage, have been made available. (D) The Indian investee company shall be responsible for obtaining all necessary approvals, including those of the building/layout plans, developing internal and peripheral areas and other infrastructure facilities, payment of development, external development and other charges andcomplying with all other requirements as prescribed under applicable rules/bye-laws/ regulationsof the State Government/ Municipal/local Body concerned. (E) The State Government/municipal/ Local Body concerned, which approves thebuilding/development plans, will monitor compliance of the above conditions by the developer.
• FDI is not permitted in an entity which is engaged or proposes to engage inreal estate business, construction of farm houses and trading in transferable development rights( TD RS ).
• “Real estate business” means dealing in land and immovable property with a view toearning profit there from and does not include development of townships, construction ofresidential/ commercial premises, roads or bridges, educational institutions, recreational facilities, city and regional level infrastructure, townships. Further, earning of rent/ income onlease of the property, not amounting to transfer, will not amount to real estate business.
• Condition of lock-in period at (A) does not apply to Hotels &Tourist Resorts, Hospitals, special Economic Zones (SEZS), Educational Institutions, Old Age Homes and investment bynris.
• Completion of the project will be determined as per the local byelaws/rules and other regulations of State Governments.
• Consequent to foreign investment, transfer of ownership and/or control of the investeecompany from residents to non-residents is also permitted. However, there would be a lockin-periodof three years, calculated with reference to each tranche of FDI, and transfer ofimmovable property or part thereof is not permitted during this period.
• Also, 100% FDI under automatic route is permitted in completed projects for operation and management of townships, malls/ shopping complexes and business centres as well as industrial parks - new and existing.