Wednesday, September 06, 2006

Government likely to ease FDI regulations in real estate

The Economic Times reports:

The Indian government is likely to offer FDI sops in real estate in an effort to bring in high profile single brand retailers such as Banana Republic, Carrera, Valentino, Lalique, Barrats and Damas, who will be able to own their own properties instead of leasing or renting them.

According to an official in the commerce and industry ministry,
“Organized retail is one of the priorities. Talks are on with the urban development ministry and a proposal for removing the minimum land area requirement for FDI is being considered.”
International retail firms are hesitant to take up a leasing option due to the complicated model of revenue percentage that most malls follow. A mall in Gurgoan, started at 4%, then increased to 5% and is currently at 6%, a system that foreign companies are not keen on getting entangled with.

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