FDI in India Real Estate

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FDI in India Real Estate has been increasing over the years because as per recent economic standards, the real estate sector in India is one of the most lucrative avenues for investments as far as foreign investors are concerned.

It has been estimated that in the last financial year 2006-07, the share of FDIs in real estate is about 26.5% of the total flow of FDIs in India which is about US$ 8 billion.

FDI in India Real Estate: Overview

Ever since the Indian government allowed the participation of the foreign direct investments in the different sectors of the Indian economy, from the year 2005, it is found that there had been 100 % FDI involvement in the real estate business. At present, FDI in India Real Estate encourages the construction of residential, commercial, as well as recreational projects. Till recently, Non Resident Indians and Persons of Indian Origin could invest in the real estate in India. Other foreign investors interested to play a part in India real estate had to enter into a joint business with any Indian company. However, the change in the government policy has benefited foreign investors and as a result there has been huge FDI inflow in India real estate from the FY 2005-06.

Some of the leading international players with a joint venture with Indian real estate developers are Lee Kim Tah Holdings, Evan Lim, CESMA International Pvt Ltd., Keppel Land, Salim Group, Edaw Ltd., Emaar Group, IJM, and Ho Hup Construction Co. At present the India real estate market of 2007, is over flooded with FDI.

Benefits of FDI in India Real Estate:

Some of the benefits of FDI in India Real Estate are:
  • to make the real estate sector in India more organized
  • to increase professionalism in the sector
  • to introduce advanced technology in the construction business
  • to create a healthy and competitive market environment for both Indian and foreign investors
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