3 year lock-in period to stay in FDI: Sharma

Foreign Direct Investment (FDI) in the real estate sector of the country which at present has been fixed by the government as a three year lock-in period will stay. This was stated by Anand Sharma, the minister of Commerce and Industry, government of India. Speaking at a FICCI meet he rejected the claims made by the real estate industry stalwarts that this three year lock-in period is restricting the flow of FDI into the country. He said that this policy is not acting as a deterrent to investments by foreign developers because if they are investing in real estate projects they will have to stay here for more than three years.

The real estate industry has been pressing the government to relax the three year lock-in period FDI policy because it feels that foreign investors are shying away from investing in the real estate sector due to this policy of the government. The minister however stated that the government has no plans to increase the duration of this three year lock-in period.

At present 100 percent FDI in real estate is allowed in the country whereby overseas investors can invest in projects like townships, housing, built-up infrastructure and construction-development projects etc though certain conditions apply. Till April 2000 investments worth USD 8.7 billion have been made in the housing and real estate sector.