The Ministry of Finance has clarified the norms for external commercial borrowing (ECB) and foreign direct investment (FDI) in the real estate sector. Under the current policy, ECBs are not permitted in the real estate sector. The Confederation of Real Estate Developers’ Associations of India had requested that ECBs be permitted for the construction of housing and that both FDI and ECB rules be modified to encourage investment in affordable housing.
[ihc-hide-content ihc_mb_type=”show” ihc_mb_who=”3″ ihc_mb_template=”2″ ]
In a press release on 27 April, the ministry clarified that it is not considering any further relaxation to FDI policy norms for the construction and development sector. The press release notes, however, that the Union Budget 2012-13 has announced that ECBs can be used for low-cost housing projects.
[/ihc-hide-content]
The legislative and regulatory update is compiled by Nishith Desai Associates, a Mumbai-based law firm. The authors can be contacted at nishith@nishithdesai.com. Readers should not act on the basis of this information without seeking professional legal advice.
