IN-SOURCING:

FDI open house in India (Kunal Kumar Kundu, 2/25/05, Asia Times)

India on Thursday liberalized rules for foreign investment in the real estate sector by deciding to allow 100% foreign direct investment (FDI) in construction. "The cabinet cleared the proposal for 100% FDI on the automatic approval route in the construction development sector," India's Commerce and Industry Minister Kamal Nath announced after a cabinet meeting. Till now, overseas firms were allowed in only after clearance from the highly bureaucratic Foreign Investment Promotion Board (FIPB).

"Foreign investors can enter any construction development area, be it to build resorts, townships or commercial premises, but they will have to construct at least 50,000 square meters within a specific time-frame," said Nath, without specifying the timeframe. "This will ensure they do not hold onto land for speculative purposes."

Nath said higher foreign investment in the real estate and construction sectors would boost employment and generate "positive spin-offs" for India's labor-intensive cement, steel and brick industries.