Monday, June 16, 2008

Foreign Direct Investment in India - issues - Assocham study

India is the only country which offers return on commercial and residential
properties which range between 20-25 per cent against 15-18 per cent in rest of Asia.

No wonder Indian real estate sector is witnessing a steady growth of more than 30 per cent and Foreign Direct Investment (FDI) worth 30 billion dollars is expected to flow into the domestic market in the next 10 years, as Assocham study says.

1) Ceiling of 50,000 sq ft: Lift the ceiling of 50,000 sq ft and increase it to 2 lakh sq ft in next 10 years in a gradual manner for much higher foreign capital absorptions.

2) Remove Multiple Approvals from number of Centre and state agencies for setting up townships

3) FDI to be routed through private equity instead of institutional mechanism.

4) Housing shortage is around 20 million units of which nearly seven million units are estimated for urban India.

1 comment:

  1. Foreign direct investment in the country's real estate sector is likely to rise to $25 billion in the next 10 years from the current $4 billion, even as the industry faces a slowdown in the short term due to rising interest rates, an Assocham study said. “Despite real estate market confronting a temporary depression with real interest rates hovering between 12-16 per cent, FDI in real estate market would increase by about $21 billion to touch $25 billion in the next 10 years,'' said industry chamber Asso cham. At present, the domestic real estate market is estimated at $15 billion, of which FDI contributions are about $4 billion. “In future, higher interest rates would subside with India scaling a GDP growth of over 10 per cent for at least a decade, and crea te a huge space for overseas investors in its real estate sector,'' Assocham President Sajjan Jindal said. The sector would grow larger as the IT sector alone is expected to require about 200 million sq ft of space across the major and large townships, it added. It is also estimated that in India's residential sector, housing shortage is around 20 million u nits. About 100 million sq ft is likely to be added by end of 2008 from over 300 mall projects.For more