The government is considering allowing up to 100 percent foreign direct investment (FDI) in completed housing projects amid growing interest from overseas investors.
The Department for Promotion of Industry and Internal Trade (DPIIT) is evaluating ways to boost investment in the real estate sector, according to a report by The Economic Times.
"There are only limited sectors where FDI norms can be further relaxed and housing is one of them," an official told the publication.
Moneycontrol could not independently verify the story. If the FDI move comes through, it will help revive the sector that has been hit by the coronavirus outbreak and is an employment provider.
At present, 100 percent FDI is permitted through the automatic route in construction-development projects (except farm houses), contingent on a three-year lock-in period.
"We are studying the policy carefully as the restriction is largely aimed at preventing speculation in the sector," a source told The Economic Times.
In 2019-20, FDI in construction development was $617 million, much higher than the $213 million recorded in FY19, the report said.The DPIIT is also planning to ease FDI norms in defence. The department is likely to move a cabinet note for seeking up to 74 percent FDI in the defence sector through the automatic route, as announced under the Aatmanirbhar Bharat Abhiyan.