India has eased foreign direct investment rules for the construction sector, the government said in a statement on Wednesday, in a move to attract more money into the country to build new hotels, housing and townships.

Under the new rules, foreign investment is now allowed in projects with a minimum built area of 20,000 sq m, down from a previous 50,000 threshold.

The minimum capital investment by foreign companies has been halved to $5 million, the statement said.

Previously, India allowed 100 per cent foreign direct investment in real estate development but with strict conditions, including a lock-in period of three years during which the investment cannot be repatriated. – Reuters