Foreign investors have remained bullish on India’s housing, real estate and construction sectors in the last two years, undaunted by scarce global financial resources. Foreign Direct Investment (FDI) in terms of inflows into equity in the Indian construction and realty sectors have seen a sharp rise from USD 1.19 billion in April-December 2007 to USD 5.6 billion in the first three quarters of the current fiscal, as per the official data.

In March 2005, the government had liberlaised the foreign investment norms with a view to catalysing investment in the realty sector. The government allows 100 per cent FDI through automatic route in construction development projects, including housing, resorts, commercial premises, educational institutions, recreational facilities, city and regional level infrastructure and townships. Though the FDI norms were liberalised in 2005, the government had imposed certain conditions like a lock-in period on repatriation of investment for three years.

The repatriation could only be allowed with permission of Foreign Investment Promotion Board. Global property consultant Jones Lang Lasalle Meghraj in a report said, “Contrary to the commonly held belief of capital flight occurring during 2008, the actual deployment of FDI into India’s real estate sector increased 29 per cent year-on-year during the financial year 2009.” Dubai-based Emaar is a major foreign investor which has entered the country in a big way.