Construction awaits easier FDI norms

In order to ensure smooth flow of funds to the country’s construction sector, Prime Minister Narendra Modi is all set to review the foreign direct investment (FDI) policy aimed at removing bottlenecks to overseas funding inflows, sources said, adding that in the upcoming meeting, the commerce and industry ministry will make a detailed presentation on proposed changes to streamline the FDI regime in the country. Finance Minister Arun Jaitley, Commerce and Industry Minister Nirmala Sitharaman and Secretary, Department of Industrial Policy and Promotion (DIPP), Ramesh Abhishek will also share their viewpoint at the meeting. The meet also assumes significance as the government is considering relaxing FDI norms in several sectors, including construction and retail. As per the current policy, 100% FDI is allowed in the construction sector subject to various conditions. As per rules, Indian investment is permitted to sell only developed plots, which means plots where trunk infrastructure - roads, water supply, street lighting, drainage and sewerage — has been made available. Although the current FDI policy allows overseas players to hold 51% stake in an Indian retail company there are also plans to permit 100% foreign investment through automatic route in single brand retail to attract a larger number of global players into the sector.