INRnews - Indian Real Estate News

According to Mr.Srinivas, a new government plan relies on FDI to transform India into a modern economy. Salient features are:

• Infrastructure: Attract more than US$150 billion within next 7-10 years to upgrade roads, airports, ports, hospitals.
• Power generation: Attract US$85 billion over next 10 years to bridge current electricity generation shortfall.
• Housing: Attract more than US$40 billion within a decade to create sufficient urban housing by 2015. There is an urban shortage of more than 12 million homes in 45 to 50 cities with a population of more than one million people each. This increases by approximately 1.5 million homes every year. Total demand for apartments in Bangalore is estimated at 24,000 units each year, with an expected annual growth rate of 20% over the next several years.
• Office Space: Attract net investment of more than $1.5 billion each year to create 25 to 30 million square feet of new office space to meet increased demand from the IT and technology sectors. According to Cushman & Wakefield estimates, office space demand will reach 66 million square feet over the next three years. Over the next 10 years, an estimated 3 to 3.5 million jobs may be outsourced to India, with Bangalore the most likely destination.

FDI in India remains controlled, though the following investments are permitted.

• Non-resident Indian investments allowed under all categories
• Direct FDI allowed in residential townships of more than 25 acres,with minimum paid-up equity capital of US$10 million, and US$5 million if invested in a joint venture
• Direct and automatic approval for IT park and hotel investments
• FDI allowed in construction with approval from the Foreign Investment Promotion Board for projects offering build-up area of more than 3.5 million square feet
• Foreign and domestic venture capital investment in real estate allowed with prior approval of Securities & Exchange Board of India
• Dividends can be freely repatriated; three-year lock-in for equity repatriation
• Within special economic zones (akin to foreign trade zones in the USA) free capital and dividends allowed with many specific tax exemptions on profits (5 to 10 years), and local taxes.
• Foreign investors allowed investment positions in greenfield/brownfield developments

Mr. Srinivas' views are presented in a Cushman & Wakefield report " Currying favor again with Foreign Investors " .

About Cushman & Wakefield

Cushman & Wakefield is the world’s pre-eminent real estate services firm. Founded in 1917, the firm has 192 offices in 58 countries around the globe, and more than 11,000 talented professionals. The firm delivers integrated solutions by actively advising, implementing and managing on behalf of landlords, tenants, and investors through every stage of the real estate process.  These solutions include helping clients to buy, sell, finance, lease, and manage assets. Cushman & Wakefield also provides valuation advice, strategic planning and research, portfolio analysis, and site selection and space location assistance, among many other advisory services.