Foreign Real Estate in India

Monday, September 05, 2005

Reasons for FDI changes

Indian authorities had maintained strict rules on foreign property investment because of concerns over the type of speculative capital flows that led to property bubbles in cities such as Bangkok, Jakarta and Kuala Lumpur in the 1990s.
But with demand for buildings soaring, Indian construction executives pressured the government to allow the kind of inward investment in property seen in South Korea since it eased its rules in the wake of the 1997-98 Asian economic crisis.

Time to repatriate capital

Foreign investors must hold their Indian assets for a minimum of three years before repatriating capital.

FDI changes: min size of 25 acres

India previously only permitted foreign investment for projects of more than 100 acres, with some exceptions in special economic zones. Now the minimum is 25 acres for housing development and 50,000 sq metres for commercial space.