DELHI: The commerce and industry ministry will soon float a revised cabinet note on relaxation of FDI norms for the construction sector.
"Yes we will...very soon," Commerce and Industry Minister Anand Sharma said when asked whether his ministry would float a cabinet note on the matter.
He was talking to reporters today after his meeting with Finance Minister P Chidambaram and Urban Development Minister Kamal Nath here on the issue.
In November last year, the proposal of the Department of Industrial Policy and Promotion (DIPP) to relax foreign direct investment (FDI) norms in the sector was discussed in the Cabinet meeting but was deferred because of concerns being raised by the Urban Development Ministry on few norms.
Cabinet had directed the ministers to iron out the differences.
The DIPP has proposed easy conditions for exit for developers before the three-year lock-in period and a change in the current requirement of having a minimum built-up area of 50,000 sq meters to 20,000 sq meters of carpet area for FDI in construction development projects.
It has also suggested a uniform minimum capitalisation of USD 5 million for both wholly-owned subsidiaries (WOS) and joint ventures with Indian parters. At present, the capitalisation requirement for OS is USD 10 million.
The move was aimed at attracting more foreign investment in construction and real estate sector.
Between April 2000 and October 2013, construction development, including townships, housing and built-up infrastructure in the country received FDI worth USD 22.77 billion or 11 per cent of the total FDI attracted by India during the period.
Press Note 2 (2005) of the DIPP allows FDI up to 100 per cent in townships with conditions.
The DIPP which deals with FDI related matter, issues provisions in the form of Press Notes or consolidated circulars.
Although 100 per cent foreign direct investment is allowed in townships, housing and built-up infrastructure and construction developments, the government has imposed conditions.