Confusion prevails over what constitutes real estate business under FDI Policy

Bar & Bench June 30 2011

Trisheet Chatterjee of J. Sagar Associates discusses the confusion that prevails over what constitutes ‘real estate business’ under the revised Consolidated FDI Policy.

The reluctance or inability of the Government to have a clear and comprehensive definition of ‘real estate business’ in the revised Consolidated FDI Policy that has been made effective from April 1, 2011 (the “FDI Policy”), is beyond comprehension. Currently, the FDI Policy prohibits foreign direct investment (“FDI”) in ‘real estate business’. However, FDI up to 100 percent is allowed under the automatic route that is without any prior approval of the Government in development of townships . . .

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