Investment in Indian Real Estate

The Indian real estate sector has witnessed robust growth in the last few years and is expected to be one of the fastest growing economies in the coming years. The process of reforms as part of liberalization has resulted in greater investment in Indian economy. Government policies have become investment friendly and paper work reduced. Real estate in India contributes about 5 per cent to India's gross domestic product (GDP). Real estate emerged as the popular sector for private equity funds.

Indian real estate has huge potential demand in almost every sector especially commercial, residential, retail, industrial, hospitality, healthcare etc. The housing sector alone contributes to 5-6 per cent of the India's GDP. The consequent increase in business opportunities and migration of the labour force has, in turn, increased the demand for commercial and housing space, especially rental housing.

The foreign direct investment (FDI) up to 100 per cent is allowed with Government's permission for developing townships and settlements. Urban population has been increasing and is expected to cross 590 million by 2030. Urbanization and growing household income are some of the major factors that influence demand for residential real estate and growth in the retail sector.

Real estate plays an important role in the Indian economy. This sector happens to be the second largest employer after agriculture and is expected to grow at the rate of 30 per cent over the next decade. The size of the Indian real estate market is expected to touch US$ 180 billion by 2020.