India opens up foreign investment in construction

India has relaxed rules for foreign direct investment in construction development, making it easier for overseas capital to invest in building. Previously 100 percent foreign direct investment in real estate development was allowed, but with strict riders, including a lock-in period of 3 years, during which the investment could not be repatriated. Under the new rules, the minimum built area for projects in which foreign investment is allowed will be reduced to 20,000 sq. mtrs and the minimum capital investment by foreign companies has been reduced to $5 million from $10 million. Also, the investor will be permitted to expatriate the investment on completion of the project or three years after the final investment is made. The new rules will encourage the development of and reduce the delay, in smaller projects. This is also seen as a move forward that may help PM Narendra Modi deliver on his promise to create 100 smart cities in India by 2020.