India relaxes rules for foreign investment

Photo: A Kap

The government announced the law Change last week, lowering the minimum floor area threshold required for overseas investment in building projects from 50,000 square metres to 20,000 square metres. (For "serviced plots", there is no minimum land requirement, down from 10 hectares, reports The Times of India.)

"These moves will help in inner-city development," Anuj Puri, chairman and country head at JLL India, told the publication. "The 20,000 square metre requirement will allow investment to flow into south Mumbai or central Delhi. So far, investment was going to the outskirts as it was tough to find area to develop or construct 50,000 square metres. As a result risk profile was higher and returns were lower (for foreign investors)."

"What we require is injection of capital for infrastructure and development. Whatever the government can do to increase capital flow in these areas will help the construction sector and the economy," added Anshuman Magazine, CMD at CBRE.