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GUIDELINES FOR FDI IN DEVELOPMENT OF
TOWNSHIP, HOUSING, BUILDING, INFRASTRUCTURE
AND CONSTRUCTION PROJECTS
With a view to catalyzing investment in
townships, housing, built-up infrastructure and construction-development projects
as
an instrument to generate economic activity, create new employment opportunities
and add to the available housing stock and built-up infrastructure, the Government
has vide Press Note No. 2 (2005 series) decided to allow FDI up to 100% under the
automatic route in township, housing, built-up infrastructure and construction-development
projects (which would include, but not be restricted to, housing, commercial premises,
hotels, resorts, hospitals, educational institutions, recreational facilities, city
and regional level infrastructure), subject to the following guidelines:
a. Minimum area to be developed under each project would be as under:
i.
In case of development of serviced housing plots, a minimum land
area of 10 hectares
ii.
In case of construction-development projects, a minimum built-up area of
50,000 sq. mts
iii.
In case of a combination project, any one of the above two conditions would
suffice
b. The investment would further be subject to the following conditions:
i.
Minimum capitalization of US$ 10 million
for wholly owned subsidiaries and US$ 5 million for joint ventures with Indian partners.
The funds would have to be brought in within six months of commencement of business
of the Company.
ii. Original investment
cannot be repatriated before a period of three years from completion of minimum
capitalization. However, the investor may be permitted to exit earlier with
prior approval of the Government through the FIPB.
c. At least 50% of the project must be developed within
a period of five years from the date of obtaining all statutory clearances.
The investor would not be permitted to sell undeveloped plots. For the purpose of
these guidelines, “undeveloped plots” will mean where roads, water supply, street
lighting, drainage, sewerage and other conveniences, as applicable under prescribed
regulations, have not been made available. It will be necessary that the investor
provides this infrastructure and obtains the completion certificate from the concerned
local body/service agency before he would be allowed to dispose of serviced housing
plots.
d. The project shall conform to the norms and standards,
including land use requirements and provision of community amenities and common
facilities, as laid down in the applicable building control regulations, bye-laws,
rules, and other regulations of the State Government/Municipal/Local Body concerned.
e. The investor 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 and other charges and complying with all other requirements as prescribed
under applicable rules/bye-laws/regulations of the State Government/Municipal/Local
Body concerned.
f. The State Government/Municipal/Local Body concerned,
which approves the building/development plans, would monitor compliance of the above
conditions by the developer.
2. Para (iv) of Press Note 4 (2001 Series), issued by
the Government on 21.5.2001, and Press Note 3 (2002 Series), issued on 4.1.2002,
stand superceded.
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FDI Prohibited |
FDI up
to 26% allowed |
FDI up
to 49% allowed |
FDI up
to 74% allowed |
FDI up
to 100% allowed Subject to conditions |
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i.Retail trading
ii.Atomic energy
iii.Lottery business
iv.Gambling & betting
sector
v.Housing and real estate business except development of integrated townships.
Agriculture (excluding Floriculture,
Horticulture, Development of Seeds, Animal Husbandry, Pisiculture and cultivation
of vegetables, mushrooms etc. under controlled conditions and services related to
agro and allied sectors) and Plantation (excluding Tea Plantations)
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i.
FM Broadcasting – only portfolio investment up to 20% with prior Government approval
ii.
Print
media: Publishing newspaper and periodicals dealing with news and current affairs
– FDI up to 26% with prior Government approval
iii.
Defence industries – FDI up to 26 % with prior Government
approval
iv.
Insurance – Foreign equity (FDI+FII) up to 26% under the
automatic route.
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i.
Broadcasting
a.
Setting up hardware facilities such as up-linking, HUB, etc. – FDI+FII
equity up to 49% with prior Government approval
b.
Cable
network – Foreign equity (FDI+FII) up to 49% with prior Government approval
c.
DTH – Foreign equity (FDI+FII) up to 49% with prior Government approval.
FDI can not exceed 20%
ii.
Domestic airlines – FDI up to 49% under the automatic route with no direct
or indirect participation of foreign airlines
iii.
Telecommunication services: basic and cellular – FDI up to 49%. However,
under license conditions foreign equity (FDI+FII) up to 49% is allowed. The
decision to raise foreign equity limit to 74% has not been notified so far.
Investing
companies in infrastructure/service sector – FDI up to 49% with prior Government
approval
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i.
Development
of Airports – up to 74% under the automatic route; prior Government approval beyond
74%
ii.
ISP
with gateways, radio-paging, end-to-end bandwidth – FDI up to 74% with FDI
beyond 49% requiring prior Government approval
iii.
Establishment and operation of satellites – FDI up to 74% with prior
Government approval
iv.
Atomic minerals – FDI up to 74% with prior Government approval
v.
Exploration and mining of coal and lignite or captive consumption – FDI
up to 74% with
FDI above 50% requiring prior Government approval.
vi.
Mining of diamonds and precious stones – FDI up to 74% under the automatic
route
Private sector banks – Foreign
equity (FDI+FII) up to 74% under the automatic route.
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i. Development of Airports
– FDI beyond 74% requires Government approval
ii.
Petroleum sector: NG/LPG pipelines with prior
Government approval
iii.
Petroleum sector: market study and formulation, investment/financing
with prior Government approval. Minimum 26% Indian equity within 5 years for
actual trading and marketing
iv.
Trading: wholesale cash and carry; exports, trading of
hi-tech items with prior Government approval. In Export trading – FDI up to
49% permitted under the automatic route.
v.
B2B e-commerce subject to divestment of 26% equity
within 5 years if the company is listed in other parts of the
vi.
Courier services – prior Government
approval
vii.Tea Sector, including
tea plantation – prior Government approval subject to divestment of 26% equity within
five years
viii.
Non Banking Finance Companies – FDI up to
100% under the automatic route subject to minimum capitalization norms.
ix.
ISP without gateway, infrastructure provider providing
dark fibre, electronic mail and voice mail – FDI up to 100% allowed subject to divestment
of 26% equity in 5 years if the investing companies are listed in other parts of
the world.
Domestic airlines – NRI
investment up to 100% permitted under the automatic route with no direct or indirect
participation of foreign airlines.
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