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The Department of Industrial Policy and Promotion (DIPP) has circulated a Cabinet note for inter-ministerial consultations on this, a source said.
The DIPP has made out a case for relaxing the foreign investment norms as it feels there is no risk for speculative inflows into the sector. The government had allowed 100 per cent FDI in 2005 with certain conditions, including a lock-in period. “Original investment cannot be repatriated before a period of three years from completion of minimum capitalisation,” the related DIPP rule of 2005 had said.
Inflows have not been very encouraging in the sector which brought in only US$7.3 billion till August, 2009. According to industry sources, problems like land acquisition have remained an area of concern.
Dubai-based Emaar is the only major foreign investor which has entered the country in a big way.