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Centre clarifies FDI policy on construction sector

Special Correspondent

NEW DELHI: The Central Government has clarified that the provisions of Press Note 2 (2005 series) allowing 100 per cent foreign direct investment (FDI) in townships, housing and construction projects, will not apply to hotels, hospitals and special economic zones.

According to an official release issued here on Wednesday, FDI up to 100 per cent was already allowed under the automatic route in the hotel and tourism sectors vide Press Note 4 (2001 series) and in the hospital sector vide Press Note 2 (2000 series). Special Economic Zones (SEZs) are separately regulated under the SEZ Act, 2005, it states.

The release says the government has received a few requests from investors seeking clarifications on the applicability of the Press Note 2 (2005 Series), which was issued in March last year. It has, therefore, clarified that establishment and operation of hotels and hospitals continue to be governed by Press Note 4 (2001 series) and Press Note 2 (2000 series), respectively.

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