The market remains tight but the large developers are holding-on to price levels. Under normal circumstances, a low demand should have resulted in overall price correction, of significant nature. However no appreciable correction is seen.
In fact, new projects like PBEL at APPA and Sunway Properties at Borampet are quoting unbelievable rates at these locations. 1.0 Factors influencing price. There are several factors in the market which makes price to remain high. This include overall inflation, rising raw material costs (Especially Cement & Steel)and shortage of labor force.
The high inflation should automatically make a rate of Rs. 3000/sft to increase to 3300/sft in a year (10% rise) but developers who commit price of Rs.3000/sft has to hold it, whatever be the inflation and increase in cement /steel prices. This situation exposes projects to under recovery risk and obviously, to mitigate this, developers are forced to quote price, with LARGER Margins.
In addition to this, the Govt. has been increasing approval fees, drastically and all increases have to be borne by Developer once price is committed. (Refer Article on GO288)The above factors have made it impractical for developers to offer considerable reduction in price.
Aparna Nallagadla - Base rate of 3500/sft + Extras
Aliens Tellapur - Base rate of 3500/sft + Extras
SMR (Miyapur) - Base rate of 3200/sft + Extras
SMR (Guchibowli) -- Base rate of 5500/sft + Extras
Sunway Properties, beside Borampet - Incredible 3600/sft with 400 Rs/sft special discount at Borampet in 2008 July? Hope sense will prevail. Wonder weathere any Hyderbadi got wooed by Malaysian girls whi manned the sales desk! We are sure people here are smart enough, to see through he scheme of things. (The price is unusally high considering the location. Definitely this Company is not passing on low land acquisition rate, to buyers instead, its asking for extremely high premium even if quality is outstanding)
PBEL, at APPA - Rs.3500/sft at APPA in 2008 with Express Highway still in early stage of NON-COMPLETION?! Wonder whether people would run and buy, at APPA at 3500/sft while apartments are available at lower prices near Narsingi, Tellapur, Nallagdla and even all around Kondapur, Nanakramguda etc The price is a bit unusual considering the location and status of Express Highway. Buyers may review quality/amenities, density (flats per acre) etc and reach own conclusion.
Maytas at Hill County -Rs.3400/sft. So over-confident earlier, now even Maytas is forced to particpate in Property Shows to try and get odd bookings.
Giridhari Constructions at APPA - Rs.3200/sft is asking price. This is said to be negotiable down to 2800/sft
Aditya Tellapur - Villas -Above 225 Lakhs There were several smaller firms all quoting Rs.3000/sft and above, even in Kukatpalli, Chanda Nagar and beyond. Indu was around with its project near Nagole. The new "kid" on the block, BHARAT was not at Exhibition. But they are quoting 3600 to 5600/sft opposite to Guchibowli University! Its going to be an uphill task for it too.
Source:
http://www.exclventures.com/News-July08-property-expo.asp
Thursday, July 31, 2008
BASIC STRUCTURE OF FABCITY, HYDERABAD
The Fabcity was to be developed in 1200 Acers with several Manufacturing Units in the Semiconductor and Nano Tech arena, setting up shop, here.
However, even after Central Govt cleared the Fab policy, no one could proceed with founding of a Fab Manufacturing plant as of May 2008. SemIndia was the first among the entrants in Fabcity. Its facility as of May 2008 is limited to ATMP plant on 100 Acres.
The balance 1100 Acers will be occupied by several other companies. For developing the 1200 Acre Fabcity, an SPV will be formed. APIIC will hold 51%, SemIndia 11% and balance will be held by FIIs and Other Companies. Due to delay in firming up plans by Fab Manufacturing Units, several companies has come forward to take advantage of tax benifits offered under Fab Policy, to Solar Module Manufactures. APIIC has tied up most of the available space in Fabcity, for Solar Module Manufacturing.
However, even after Central Govt cleared the Fab policy, no one could proceed with founding of a Fab Manufacturing plant as of May 2008. SemIndia was the first among the entrants in Fabcity. Its facility as of May 2008 is limited to ATMP plant on 100 Acres.
The balance 1100 Acers will be occupied by several other companies. For developing the 1200 Acre Fabcity, an SPV will be formed. APIIC will hold 51%, SemIndia 11% and balance will be held by FIIs and Other Companies. Due to delay in firming up plans by Fab Manufacturing Units, several companies has come forward to take advantage of tax benifits offered under Fab Policy, to Solar Module Manufactures. APIIC has tied up most of the available space in Fabcity, for Solar Module Manufacturing.
Can’t sell? Why not trade, instead?
Difficulties in selling a home in today’s shaky economic climate have caused some homeowners to think outside of the box and into the past
Rather than offering incentives, such as plasma TVs, some homeowners are going back to the way business was done in the olden days, when bartering was an everyday occurrence, and have put their homes up for “swap.”
“Basically, it’s reciprocal selling — you buy mine, I buy yours. Two homeowners buy each other’s houses / Assets.
As this approach only works if the perfect match is made, OnlineHouseTrading is designed much like a dating service: Each party enters both their own home’s criteria and that of what they are looking for, and OnlineHouseTrading provides them with the potential matches with whom to swap their homes.
Right now, there are a lot of sellers that want to be buyers, but they can’t sell. The likelihood of selling is slim to none — there’s too much competition with short sales, foreclosures.
The house-trading approach can work for nearly anyone, as it’s possible to move up or down in size and price, or even trade to another city or state.
Rather than offering incentives, such as plasma TVs, some homeowners are going back to the way business was done in the olden days, when bartering was an everyday occurrence, and have put their homes up for “swap.”
“Basically, it’s reciprocal selling — you buy mine, I buy yours. Two homeowners buy each other’s houses / Assets.
As this approach only works if the perfect match is made, OnlineHouseTrading is designed much like a dating service: Each party enters both their own home’s criteria and that of what they are looking for, and OnlineHouseTrading provides them with the potential matches with whom to swap their homes.
Right now, there are a lot of sellers that want to be buyers, but they can’t sell. The likelihood of selling is slim to none — there’s too much competition with short sales, foreclosures.
The house-trading approach can work for nearly anyone, as it’s possible to move up or down in size and price, or even trade to another city or state.
Wednesday, July 30, 2008
Marketing - Using Web2.0
It doesn’t matter how great the properties are that you have available. It also doesn’t matter how good the price is if you don’t get people to recognize what you are offering.
There will always be people looking for a home to move into or sellers looking to buy regardless of market conditions. Therefore we need to do our part to reach out to those people. we have to be able to discover who our target market is.
These days we need to be able to implement both online and offline methods of real estate marketing techniques. This way we will reach the largest volume of possible buyers for the properties listed.
Here are a few things we can do:
-Web 2.0 the use of social media networks and video sharing sites to build a list of eager buyers and sellers to market to.-Pay per click (PPC) to get listings sold and our website noticed.-The use of well targeted direct mail to capture more leads-Real estate search engine optimization to build a better visibility for our business-Direct response copy to get buyers and sellers salivating to use you to buy or sell their home.
This is a very effective type of real estate marketing technique that will come with time. we can encourage our clients to tell others but often we don’t have to. People will do this automatically if they feel they have been treated well and gotten the very best possible service available.
There will always be people looking for a home to move into or sellers looking to buy regardless of market conditions. Therefore we need to do our part to reach out to those people. we have to be able to discover who our target market is.
These days we need to be able to implement both online and offline methods of real estate marketing techniques. This way we will reach the largest volume of possible buyers for the properties listed.
Here are a few things we can do:
-Web 2.0 the use of social media networks and video sharing sites to build a list of eager buyers and sellers to market to.-Pay per click (PPC) to get listings sold and our website noticed.-The use of well targeted direct mail to capture more leads-Real estate search engine optimization to build a better visibility for our business-Direct response copy to get buyers and sellers salivating to use you to buy or sell their home.
This is a very effective type of real estate marketing technique that will come with time. we can encourage our clients to tell others but often we don’t have to. People will do this automatically if they feel they have been treated well and gotten the very best possible service available.
RBI move adds to real estate sector’s woes
The Reserve Bank of India’s decision to raise repo rate and cash reserve ratio is expected to add to woes of the real estate sector.
The realty industry — which is already smarting under a sluggish demand and price correction — feels that RBI’s move would tighten the liquidity crunch for developers, and dampen end user demand by putting pressure on home loan rates.
“The hike in repo rate and CRR will negatively impact real estate sector. The hike would mean flow of money to the sector would be tighter than before.
The developers will now have to look towards other sources of funds, which could be on higher rates thus impacting the cost-benefit ratio of each company.
However at Omaxe we may not feel slowdown in the company’s investment plans and they stay as announced earlier,” Mr Sunil Malhotra, Vice-President (Finance), Omaxe Ltd, said.Delay projects
According to Mr Sanjay Verma, Executive Managing Director (South Asia) of Cushman & Wakefield, the credit policy has set the stage for hardening of interest rates.
“This is bad news for developers. Already, the credit crunch is hurting project financing, which is leading to delays in residential and commercial projects. Projects could now get delayed further,” he said.
Real estate players are currently grappling with dwindling sales, correction in land prices, tepid demand, and rising input costs, even as they face a liquidity squeeze. In such a scenario, if banks hike the interest rates on home loans further, the residential demand is likely to get hit, said industry observers.
Mr Pradeep Jain, Chairman, Parsvnath Developers Ltd, agreed that increase in cost of borrowing (for developers) would escalate the cost of the real estate project — the burden would ultimately be passed on to consumers. “The cost of borrowing goes up not only for builders but for all ancillary and input industries as well, leading to a higher price tag for the real estate product.
Moreover, it has an impact on home loans,” he said, but pointed out that foreign direct investment still remained a viable option for the players to raise capital.
Mr Jain also opined that end users or first time home buyers are unlikely to get deterred by a marginal hike in the home loan rates.
The board consensus in the industry is that increase in home loan rates would certainly have a detrimental effect on the mid and upper-end segment of home buyers. Mr Kunal Banerji, President, Marketing, Ansal Infrastructure and Properties Ltd, said “Although, we do not predict any drastic change in the overall robust demand for quality housing at this stage, there could be a long-term effect on the speed of the overall growth, particularly in the residential real estate category.”
Echoing the sentiments, Mr Ajay Mangal, Director (Finance), Uppal Group, felt that demand will surely be hit once the home loans become costlier.
http://www.thehindubusinessline.com/2008/07/30/stories/2008073051521200.htm
The realty industry — which is already smarting under a sluggish demand and price correction — feels that RBI’s move would tighten the liquidity crunch for developers, and dampen end user demand by putting pressure on home loan rates.
“The hike in repo rate and CRR will negatively impact real estate sector. The hike would mean flow of money to the sector would be tighter than before.
The developers will now have to look towards other sources of funds, which could be on higher rates thus impacting the cost-benefit ratio of each company.
However at Omaxe we may not feel slowdown in the company’s investment plans and they stay as announced earlier,” Mr Sunil Malhotra, Vice-President (Finance), Omaxe Ltd, said.Delay projects
According to Mr Sanjay Verma, Executive Managing Director (South Asia) of Cushman & Wakefield, the credit policy has set the stage for hardening of interest rates.
“This is bad news for developers. Already, the credit crunch is hurting project financing, which is leading to delays in residential and commercial projects. Projects could now get delayed further,” he said.
Real estate players are currently grappling with dwindling sales, correction in land prices, tepid demand, and rising input costs, even as they face a liquidity squeeze. In such a scenario, if banks hike the interest rates on home loans further, the residential demand is likely to get hit, said industry observers.
Mr Pradeep Jain, Chairman, Parsvnath Developers Ltd, agreed that increase in cost of borrowing (for developers) would escalate the cost of the real estate project — the burden would ultimately be passed on to consumers. “The cost of borrowing goes up not only for builders but for all ancillary and input industries as well, leading to a higher price tag for the real estate product.
Moreover, it has an impact on home loans,” he said, but pointed out that foreign direct investment still remained a viable option for the players to raise capital.
Mr Jain also opined that end users or first time home buyers are unlikely to get deterred by a marginal hike in the home loan rates.
The board consensus in the industry is that increase in home loan rates would certainly have a detrimental effect on the mid and upper-end segment of home buyers. Mr Kunal Banerji, President, Marketing, Ansal Infrastructure and Properties Ltd, said “Although, we do not predict any drastic change in the overall robust demand for quality housing at this stage, there could be a long-term effect on the speed of the overall growth, particularly in the residential real estate category.”
Echoing the sentiments, Mr Ajay Mangal, Director (Finance), Uppal Group, felt that demand will surely be hit once the home loans become costlier.
http://www.thehindubusinessline.com/2008/07/30/stories/2008073051521200.htm
Indian FDI Rules – Real Estate
Indian FDI Rules – Real Estate
Government of India (Ministry of Commerce & Industry) - PRESS NOTE NO. 2 (2006 SERIES)
Subject: Clarification regarding Foreign Direct Investment (FDI) in townships, housing, built-up infrastructure and construction-development projects.
1. The Government, vide Press Note 2 (2005 Series) dated 2.3.2005, had notified the policy for Foreign Direct Investment (FDI) in townships, housing, built-up infrastructure and construction-development projects. The Government has received few requests from investors seeking clarifications on applicability of these policy guidelines to some other sectors such as Special Economic Zones, Hotels, Hospitals, etc.
2. The matter has been considered in the light of the policy prevailing prior to issue of the subject Press Note. FDI up to 100% was already allowed under the automatic route in the Hotel and tourism sector vide Press Note 4 (2001 Series) and in the Hospital sector vide Press Note 2(2000 Series). Special Economic Zones are separately regulated under the Special Economic Zone Act, 2005.
3. It is clarified that the provisions of Press Note 2 (2005 Series) shall not apply to Special Economic Zones; neither shall it apply to establishment and operation of hotels and hospitals which shall continue to be governed by Press Note 4 (2001 Series) and Press Note 2 (2000 Series) respectively.
(Umesh Kumar) Joint Secretary to the Government of India - F. No. 12/36/2005-FC dated 16 January 2006
Government of India (Ministry of Commerce & Industry) - Press Note 2 (2005)
Subject: Foreign Direct Investment (FDI) in townships, housing, built-up infrastructure and construction-development projects.
1. With a view to catalyzing investment in townships, housing, built-up infrastructure and construction-development projects as an instrument to generate economic activity, create new employment opportunities and add to the available housing stock and built-up infrastructure, the Government has decided to allow FDI up to 100% under the automatic route in townships, housing, built-up infrastructure and construction-development projects (which would include, but not be restricted to, housing, commercial premises, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional level infrastructure), subject to the following guidelines:
a. Minimum area to be developed under each project would be as under:
i. In case of development of serviced housing plots, a minimum land area of 10 hectares
ii. In case of construction-development projects, a minimum built-up area of 50,000 sq.mts
iii. In case of a combination project, anyone of the above two conditions would suffice
b. The investment would further be subject to the following conditions:
i. Minimum capitalization of US$10 million for wholly owned subsidiaries and US$ 5 million for joint ventures with Indian partners. The funds would have to be brought in within six months of commencement of business of the Company.
ii. Original investment cannot be repatriated before a period of three years from completion of minimum capitalization. However, the investor may be permitted to exit earlier with prior approval of the Government through the FIPB.
c. At least 50% of the project must be developed within a period of five years from the date of obtaining all statutory clearances. The investor would not be permitted to sell undeveloped plots. For the purpose of these guidelines, "undeveloped plots" will mean where roads, water supply, street lighting, drainage, sewerage, and other conveniences, as applicable under prescribed regulations, have not been made available. It will be necessary that the investor provides this infrastructure and obtains the completion certificate from the concerned local body/service agency before he would be allowed to dispose of serviced housing plots.
d. The project shall conform to the norms and standards, including land use requirements and provision of community amenities and common facilities, as laid down in the applicable building control regulations, bye-laws, rules, and other regulations of the State Government/Municipal/Local Body concerned.
e. The investor shall be responsible for obtaining all necessary approvals, including those of the building/layout plans, developing internal and peripheral areas and other infrastructure facilities, payment of development, external development and other charges and complying with all other requirements as prescribed under applicable rules/bye-Iaws/regulations of the State Government/Municipal/Local Body concerned.
f. The State Government/Municipal/Local Body concerned, which approves the building/ development plans, would monitor compliance of the above conditions by the developer.
2. Para (iv) of Press Note 4 (2001 Series), issued by the Government on 21.5.2001, and Press Note 3 (2002 Series), issued on 4.1.2002, stand superceded.
(Umesh Kumar) - Joint Secretary to the Government of India No. 5(6)/2000-FC dated 3 March 2005
Government of India (Ministry of Commerce & Industry) - PRESS NOTE NO. 4 (2001 SERIES)
Subject : Revision of existing sectoral guidelines and equity cap on Foreign Direct Investment (FDI), including investment by Non Resident Indians (NRIs) and Overseas Corporate Bodies (OCBs)
With a view to further liberalizing the FDI regime, Government have effected the following changes in the FDI policy:
ii. FDI up to 100% is permitted in airports, with FDI above 74% requiring prior approval of the Government.
iv. FDI up to 100% is permitted for development of integrated townships, including housing, commercial premises, hotels, resorts, city and regional level urban infrastructure facilities such as roads and bridges, mass rapid transit systems; and manufacture of building materials. Development of land and providing allied infrastructure will form an integral part of township’s development, for which necessary guidelines/norms relating to minimum capitalization, minimum land area, etc., will be notified separately by the Government. FDI in this sector would be permissible with prior Government approval.
v. FDI up to 100% is permitted on the automatic route in hotel and tourism sector.
vii. FDI up to 100% is permitted on the automatic route for Mass Rapid Transport Systems in all metropolitan cities, including associated commercial development of real estate.
viii. NRI investment in foreign exchange is made fully repatriable whereas investments made in Indian rupees through rupee accounts shall remain nonrepatriable.
2. The provisions of Press Note No. 2 of 2000 stand modified to the above extent.
(M. S. SRINIVASAN) - Joint Secretary - No. 5(6)/2000-FC I dated: 21 May 2001
Government of India- (Ministry of Commerce & Industry) - Press Note No.2 (2000 Series)
No.7(4)/2000-IP dated 11 February 2000 SECTOR SPECIFIC GUIDELINES FOR FOREIGN DIRECT INVESTMENT
18. Roads & Highways, Ports and Harbors: FDI up to 100% under automatic route is permitted in projects for construction and maintenance of roads, highways, vehicular bridges, toll roads, vehicular tunnels, ports and harbors.
19. Hotels & Tourism: 100% FDI is permissible in the sector. The term hotels include restaurants, beach resorts, and other tourist complexes providing accommodation and/or catering and food facilities to tourists. Tourism related industry includes travel agencies, tour operating agencies and tourist transport operating agencies, units providing facilities for cultural, adventure and wild life experience to tourists, surface, air and water transport facilities to tourists, leisure, entertainment, amusement, sports, and health units for tourists and Convention/Seminar units and organization. Automatic route is also available up to 51% subject to the following parameters. For foreign technology agreements, automatic approval is granted if:
i. up to 3% of the capital cost of the project is proposed to be paid for technical and consultancy services including fees for architecture, design, supervision, etc.
ii. up to 3% of the net turnover is payable for franchising and marketing/publicity support fee, and
iii. up to 10% of gross operating profit is payable for management fee, including incentive fee.
Government of India (Ministry of Commerce & Industry) - PRESS NOTE NO. 2 (2006 SERIES)
Subject: Clarification regarding Foreign Direct Investment (FDI) in townships, housing, built-up infrastructure and construction-development projects.
1. The Government, vide Press Note 2 (2005 Series) dated 2.3.2005, had notified the policy for Foreign Direct Investment (FDI) in townships, housing, built-up infrastructure and construction-development projects. The Government has received few requests from investors seeking clarifications on applicability of these policy guidelines to some other sectors such as Special Economic Zones, Hotels, Hospitals, etc.
2. The matter has been considered in the light of the policy prevailing prior to issue of the subject Press Note. FDI up to 100% was already allowed under the automatic route in the Hotel and tourism sector vide Press Note 4 (2001 Series) and in the Hospital sector vide Press Note 2(2000 Series). Special Economic Zones are separately regulated under the Special Economic Zone Act, 2005.
3. It is clarified that the provisions of Press Note 2 (2005 Series) shall not apply to Special Economic Zones; neither shall it apply to establishment and operation of hotels and hospitals which shall continue to be governed by Press Note 4 (2001 Series) and Press Note 2 (2000 Series) respectively.
(Umesh Kumar) Joint Secretary to the Government of India - F. No. 12/36/2005-FC dated 16 January 2006
Government of India (Ministry of Commerce & Industry) - Press Note 2 (2005)
Subject: Foreign Direct Investment (FDI) in townships, housing, built-up infrastructure and construction-development projects.
1. With a view to catalyzing investment in townships, housing, built-up infrastructure and construction-development projects as an instrument to generate economic activity, create new employment opportunities and add to the available housing stock and built-up infrastructure, the Government has decided to allow FDI up to 100% under the automatic route in townships, housing, built-up infrastructure and construction-development projects (which would include, but not be restricted to, housing, commercial premises, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional level infrastructure), subject to the following guidelines:
a. Minimum area to be developed under each project would be as under:
i. In case of development of serviced housing plots, a minimum land area of 10 hectares
ii. In case of construction-development projects, a minimum built-up area of 50,000 sq.mts
iii. In case of a combination project, anyone of the above two conditions would suffice
b. The investment would further be subject to the following conditions:
i. Minimum capitalization of US$10 million for wholly owned subsidiaries and US$ 5 million for joint ventures with Indian partners. The funds would have to be brought in within six months of commencement of business of the Company.
ii. Original investment cannot be repatriated before a period of three years from completion of minimum capitalization. However, the investor may be permitted to exit earlier with prior approval of the Government through the FIPB.
c. At least 50% of the project must be developed within a period of five years from the date of obtaining all statutory clearances. The investor would not be permitted to sell undeveloped plots. For the purpose of these guidelines, "undeveloped plots" will mean where roads, water supply, street lighting, drainage, sewerage, and other conveniences, as applicable under prescribed regulations, have not been made available. It will be necessary that the investor provides this infrastructure and obtains the completion certificate from the concerned local body/service agency before he would be allowed to dispose of serviced housing plots.
d. The project shall conform to the norms and standards, including land use requirements and provision of community amenities and common facilities, as laid down in the applicable building control regulations, bye-laws, rules, and other regulations of the State Government/Municipal/Local Body concerned.
e. The investor shall be responsible for obtaining all necessary approvals, including those of the building/layout plans, developing internal and peripheral areas and other infrastructure facilities, payment of development, external development and other charges and complying with all other requirements as prescribed under applicable rules/bye-Iaws/regulations of the State Government/Municipal/Local Body concerned.
f. The State Government/Municipal/Local Body concerned, which approves the building/ development plans, would monitor compliance of the above conditions by the developer.
2. Para (iv) of Press Note 4 (2001 Series), issued by the Government on 21.5.2001, and Press Note 3 (2002 Series), issued on 4.1.2002, stand superceded.
(Umesh Kumar) - Joint Secretary to the Government of India No. 5(6)/2000-FC dated 3 March 2005
Government of India (Ministry of Commerce & Industry) - PRESS NOTE NO. 4 (2001 SERIES)
Subject : Revision of existing sectoral guidelines and equity cap on Foreign Direct Investment (FDI), including investment by Non Resident Indians (NRIs) and Overseas Corporate Bodies (OCBs)
With a view to further liberalizing the FDI regime, Government have effected the following changes in the FDI policy:
ii. FDI up to 100% is permitted in airports, with FDI above 74% requiring prior approval of the Government.
iv. FDI up to 100% is permitted for development of integrated townships, including housing, commercial premises, hotels, resorts, city and regional level urban infrastructure facilities such as roads and bridges, mass rapid transit systems; and manufacture of building materials. Development of land and providing allied infrastructure will form an integral part of township’s development, for which necessary guidelines/norms relating to minimum capitalization, minimum land area, etc., will be notified separately by the Government. FDI in this sector would be permissible with prior Government approval.
v. FDI up to 100% is permitted on the automatic route in hotel and tourism sector.
vii. FDI up to 100% is permitted on the automatic route for Mass Rapid Transport Systems in all metropolitan cities, including associated commercial development of real estate.
viii. NRI investment in foreign exchange is made fully repatriable whereas investments made in Indian rupees through rupee accounts shall remain nonrepatriable.
2. The provisions of Press Note No. 2 of 2000 stand modified to the above extent.
(M. S. SRINIVASAN) - Joint Secretary - No. 5(6)/2000-FC I dated: 21 May 2001
Government of India- (Ministry of Commerce & Industry) - Press Note No.2 (2000 Series)
No.7(4)/2000-IP dated 11 February 2000 SECTOR SPECIFIC GUIDELINES FOR FOREIGN DIRECT INVESTMENT
18. Roads & Highways, Ports and Harbors: FDI up to 100% under automatic route is permitted in projects for construction and maintenance of roads, highways, vehicular bridges, toll roads, vehicular tunnels, ports and harbors.
19. Hotels & Tourism: 100% FDI is permissible in the sector. The term hotels include restaurants, beach resorts, and other tourist complexes providing accommodation and/or catering and food facilities to tourists. Tourism related industry includes travel agencies, tour operating agencies and tourist transport operating agencies, units providing facilities for cultural, adventure and wild life experience to tourists, surface, air and water transport facilities to tourists, leisure, entertainment, amusement, sports, and health units for tourists and Convention/Seminar units and organization. Automatic route is also available up to 51% subject to the following parameters. For foreign technology agreements, automatic approval is granted if:
i. up to 3% of the capital cost of the project is proposed to be paid for technical and consultancy services including fees for architecture, design, supervision, etc.
ii. up to 3% of the net turnover is payable for franchising and marketing/publicity support fee, and
iii. up to 10% of gross operating profit is payable for management fee, including incentive fee.
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