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Easing of FDI norm in realty brokerage to boost investment

Press Trust of India  |  New Delhi 

The government's clarification that are not business and hence eligible for 100 per cent under the automatic route would provide clarity to global players for future JVs and wholly-owned presence in India, according to experts.

This will also help in making market organised, they said.

Commenting on the development, Abhishek Goenka, Leader - Direct Tax, India, said the clarification was long overdue.

"The industry was saddled with differing views and interpretations on this count, and this should now ease the pain for existing international players, as well as provide clarity for future JVs and wholly owned presence in India," he added.

Bhairav Dalal, Partner - Tax, India, said this is a welcome clarification especially given the number of start ups in this space offering innovative broking products.

said: "The 100 per cent route had existed in previous years, allowing various multi-national property consultancies to enter without local partners. Then, the route was closed down without notice or explanation."

"As such, this is historically not a new provision, but the timing of its re-introduction is certainly right, with RERA (new realty law) now deployed and looking to have nation-wide coverage," Puri added.

However, he said the players who can benefit from opening up of are naturally limited, considering that only between 10-20 per cent of property brokers and brokerages have registered themselves under RERA so far.

Puri said this is another clear sign that Indian real estate, which was notorious for shady dealings in previous years, is going from unorganised to organised at a fairly rapid pace.

Ramesh Nair, JLL India, said the opening up of FDI for is a strong signal of institutionalisation of the services rendered towards real estate in

"With this, establishing and growing large real estate services firm will become more feasible, making it easier to raise capital for such services," he added.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, January 10 2018. 18:00 IST