BJP may make retail FDI more investor friendly
Official sources say Rajnath Singh, Arun Jaitley have indicated they would look to deepen the FDI policy, albeit in a calibrated manner
May 16, 2014
Source : Business Standard


DELHI: Contrary to the perception that a Bharatiya Janata Party (BJP)-led government might prohibit foreign direct investment (FDI) in sectors like multi-brand retail, senior bureaucrats believe the FDI regime could be further opened up.

"Any new government, even if it is headed by BJP, understands and realises very well that the country needs foreign capital. The easiest way to get it is through liberalising the FDI policy," says a top official, asking not to be named.

FDI inflows into the country have been declining over the past two years despite policy easing in about a dozen sectors. In the period from April 2013 to February 2014, these fell 0.6 per cent on a year-on-year basis to $20.76 billion. In full 2012-13 financial year, the inflows were down 36 per cent from those the previous year to $22.42 billion.


    Senior bureaucrats believe India’s FDI policy would be liberalised under a BJP-led govt

    FDI policy for multi-brand retail unlikely to be reversed; in fact, the riders in the policy could be relaxed gradually

    Initial focus, however, could be on electronic commerce, railways and real estate

    Foreign direct investment  inflows in the period from April 2013 to February 2014 were down 0.6% on an annual basis; in full 2012-13, these were down 36% year-on-year

According to the official, BJP leaders like Rajnath Singh and Arun Jaitley gave a clear indication during their meetings with bureaucrats that the party, if it came to power, would look to deepen the FDI policy, albeit in a calibrated manner.

Once the government settled down, it would kick-start the process of allowing foreign investment in e-commerce, followed by railways and real estate. But the most important thing that came through was that the party did not intend to reverse the FDI policy for multi-brand retail, said the bureaucrats Business Standard spoke to.

Another official privy to the discussions said BJP would not only stay with the decision on multi-brand retail FDI but it might relax some of the stiff riders in the policy, though gradually, to make the policy more investor-friendly.

Foreign retailers from the US and Europe, as well as some big chains from the Association of Southeast Asian Nations (Asean) have opposed the current FDI policy for multi-brand retail, citing conditions like 30 per cent domestic sourcing from small and medium enterprises.

Another bone of contention was the fact that the policy, rolled out in September 2012, was structured as a state-enabling decision. Since the announcement of the policy, there was been only one major investment commitment - from British retail major Tesco, which has tied up with Tata Group's retail venture Trent Ltd and intends to put in $140 million.

BJP has said in its election manifesto that it intends to allow FDI in all sectors - except multi-brand retail - where it is necessary for job and asset creation. Before the elections were announced, the United Progressive Alliance (UPA) government had advanced its proposals to allow FDI in the railways and liberalise the regime for the real estate sector. However, both proposals got stalled as the model code of conduct kicked in.

It was mooted that 100 per cent FDI would be allowed in the construction & maintenance segments of the railways.

The department of industrial policy and promotion had proposed that FDI of up to 100 per cent be allowed in dedicated freight corridors and high-speed railway networks falling in the fixed-line category. At present, FDI is prohibited in railway transport other than the mass rapid transport system and component manufacturing.

Similarly, in real estate, the idea was to ease the FDI rules. If and when the new policy goes through, foreign developers would be allowed to take back the entire invested amount before three years, after obtaining the government's approval.

According to the FDI policy, the lock-in of three years applies to every tranche of investment brought in by a foreign player from the date of receipt or from the date of 'completion' of minimum capitalisation (whichever is later). Foreign developers had been complaining restrictions like the lock-in norms deterred them from investing in the Indian market.












Latest Realty News

Maintenance charge: Pay and forget?
May 16, 2014
DELHI: Scene 1: You enter a with no security check and as you walk in, there is peeling paint, crumbling plaster, unkempt lawn, garbage spilt over in the common areas, lifts not working but the ‘works’ are there in the lift!
How banks determine home-loan eligibility
May 16, 2014
DELHI: Buying a home is an important personal finance decision. This not only compels us to use our savings for paying down payment for homeloan, it also makes changes to our lifestyle to accommodate the new EMI payment for the home loan.
Mumbai: The ‘undisputed king’ in Indian office market
May 16, 2014
MUMBAI: International property consultancy JLL India, has released its latest research report ‘Mumbai Offices 2020: Mapping the Future of the Mumbai Office Market’. Anticipating the changing trends of commercial real estate in India’s financial capital, ‘Mumbai Offices 2020’ provides ‘foresight with purpose’ into where Mumbai’s office market is headed. Talking about this report, Ramesh Nair, COO – business, JLL India, says, “With this report, we reaffirm that Mumbai will continue to be acknowled
What Pune real estate can expect from the new government
May 16, 2014
PUNE: Even though the BJP-led NDA government has taken up the driving seat, it is only time that will tell how real estate friendly it turns out to be. Real estate is a sector wherein the State government plays a larger role than the Central government, as every state government has its own policies. At this moment in time, what we can hope for is:
Maximum Scope of Money Laundering in Real Estate Sector: ED
May 15, 2014
DELHI: The real estate sector in India has the maximum scope for money laundering activities and there should be some sort of regulatory mechanism to keep a check on such activities, Special Director of the Enforcement Directorate Balesh Kumar today said.
Noida may see 10% rise in allotment rates
May 15, 2014
DELHI: Buying property in Noida is likely to cost more from June. The Noida Authority proposes to hike the land allotment rate of residential and commercial properties by 15% and industrial properties by 10%, respectively, according to sources. The new rates are likely to be effective from June.
Good returns drive residential market of Golf Course Extension Road
May 15, 2014
DELHI: Golf Course Extension Road has been developing as a premier lifestyle destination for residential and commercial property owing to fast-paced infrastructural development and good connectivity to NH-8 and South Delhi through Gurgaon-Faridabad Expressway.
Investments have an edge along NH-8
May 15, 2014
DELHI: National Highway 8 has been playing a crucial role in catering to the people coming from all corners of the country by facilitating the growth of commercial and residential property investments along this stretch.
It’s raining offers in real estate sector too!
May 14, 2014
MUMBAI: Cash discounts, freebies, lucky draws, sale fiestas, home buying days, foreign trips, et al; if anyone were to talk about all of these in the real estate context, even five years back, it would just elicit disbelieving responses. Today, all these selling strategies, which have been drawn from sectors like retail, FMCGs, etc., is a major part of any real estate company’s marketing and branding strategy. As the players in the organised sector of real estate grow in numbers and profit margi
Builder fined for not delivering flats
May 14, 2014
DELHI: In what could tame builders who fail to deliver houses on time, the National Consumer Disputes Redressal Forum has asked realty major Parsvnath Developers to return the entire principal amount paid by two flat buyers with 18% interest and another Rs 7 lakh compensation to each for causing mental agony and harassment because of delay in handing over possession.

Latest Realty News Of State

Realty Talk's