Schedule I explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Serial numbers 10 and 11 of the sectoral Table in Schedule I to the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 are the entries for building things on land: construction development projects (townships, housing, built-up infrastructure) and industrial parks. Both are open up to hundred per cent on the automatic route. The detail is in the conditions: exit and lock-in, sale of developed plots only, and the line between construction and prohibited "real estate business". The Rules are made under clauses (aa) and (ab) of sub-section (2) of section 46 of the Foreign Exchange Management Act, 1999.
This article states the position as per the Rules notified on 17 October 2019 (S.O. 3732(E)) as amended by the notifications named in this article; the latest amendment consulted is S.O. 4870(E) dated 2 September 2026. Later amendments, press notes and sector regulators' conditions should be checked before acting. A foreign developer forming a project company can use our Indian subsidiary service.
Construction development projects and industrial parks: hundred per cent, automatic route. Each phase is a separate project. The investor may exit on completion of the project or after development of trunk infrastructure; an earlier exit with repatriation needs a lock-in of three years for each tranche. The company may sell only developed plots. Foreign investment is not permitted in real estate business, construction of farm houses or trading in transferable development rights. Industrial parks escape the construction conditions if they have at least 10 units, no unit above 50 percent of allocable area, and at least 66 percent of allocable area for industrial activity.
The entries as the Table prints them
| Serial number | Sector or activity | Sectoral cap | Entry route |
|---|---|---|---|
| 10 | Construction Development: Townships, Housing, Built-up infrastructure (heading) | - | - |
| 10.1 | Construction-development projects (which shall include development of townships, construction of residential/commercial premises, roads or bridges, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional level infrastructure, townships) | Hundred per cent | Automatic |
| 10.2 | Other conditions (a) to (g) and Notes (1) to (7) | - | - |
| 11 | Industrial Parks | Hundred per cent | Automatic |
| 11.1 | Definitions (a) to (e) | - | - |
| 11.2 | Conditions (a), (b) | - | - |
The Table prints the cap as a percentage figure; it is written in words throughout this article. The Gazette prints the number "10.2" twice, once against the heading "Other Conditions" and again before clause (a).
Amendments. Both serial numbers stand as notified on 17 October 2019; none of the 19 amending notifications up to 2 September 2026 changes them. The related Explanation to paragraph 2(f) of Schedule I, on "real estate business", was substituted by the Foreign Exchange Management (Non-debt Instruments) (Amendment) Rules, 2022, S.O. 1802(E) dated 12 April 2022.
Serial number 10.2: the seven conditions
(a) Each phase of the construction development project is considered a separate project.
(b) The investor is permitted to exit on completion of the project or after development of trunk infrastructure, that is, roads, water supply, street lighting, drainage and sewerage.
(c) Notwithstanding (b), a person resident outside India is permitted to exit and repatriate foreign investment before completion of the project under the automatic route, provided a lock-in period of three years, calculated with reference to each tranche of foreign investment, has been completed. Transfer of stake from one person resident outside India to another, without repatriation of foreign investment, is subject neither to any lock-in period nor to any Government approval.
(d) The project shall conform to the norms and standards, including land use requirements and provision of community amenities and common facilities, laid down in the applicable building control regulations, bye-laws, rules and other regulations of the State Government or Municipal or Local Body concerned.
(e) The Indian investee company is permitted to sell only developed plots, meaning plots where trunk infrastructure (roads, water supply, street lighting, drainage and sewerage) has been made available.
(f) The Indian investee company is responsible for obtaining all necessary approvals, including building or layout plans, developing internal and peripheral areas and other infrastructure facilities, payment of development, external development and other charges, and complying with all other requirements under the applicable State or local rules.
(g) The State Government or Municipal or Local Body concerned, which approves the building or development plans, shall monitor compliance of these conditions by the developer.
The seven Notes
(1) Foreign investment is not permitted in an entity which is engaged or proposes to engage in real estate business, construction of farm houses and trading in transferable development rights (TDRs).
(2) The lock-in condition does not apply to hotels and tourist resorts, hospitals, Special Economic Zones, educational institutions, old age homes and investment by NRIs or OCIs.
(3) Completion of the project is determined as per the local bye-laws, rules and other regulations of State Governments.
(4) Foreign investment up to hundred per cent under the automatic route is permitted in completed projects for operating and managing townships, malls or shopping complexes and business centres. Transfer of ownership and/or control of the investee company from residents to non-residents is also permitted, but there is a lock-in period of three years, calculated with reference to each tranche, and transfer of immovable property or part thereof is not permitted during this period.
(5) "Transfer", in relation to this sector, includes sale, exchange or relinquishment of the asset; extinguishment of any rights in it; compulsory acquisition under any law; a transaction allowing possession of immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882; and any transaction, by acquiring capital instruments in a company or by agreement or arrangement or otherwise, which has the effect of transferring, or enabling the enjoyment of, any immovable property.
(6) "Real estate business" means dealing in land and immovable property with a view to earning profit therefrom and does not include development of townships, construction of residential or commercial premises, roads or bridges, educational institutions, recreational facilities, city and regional level infrastructure, townships. Its Explanation adds that investment in units of registered REITs is excluded, that earning of rent income on lease of the property, not amounting to transfer, is not real estate business, and repeats the meaning of transfer.
(7) Real estate broking services are excluded from the definition of "real estate business", and hundred per cent foreign investment is allowed in real estate broking services under the automatic route.
The same term in paragraph 2(f)
"Real estate business or construction of farm houses" is item (f) of the prohibited list. Its Explanation, as substituted by S.O. 1802(E) dated 12 April 2022, now gives one meaning that covers the same ground as Notes (6) and (7): dealing in land and immovable property with a view to earning profit, not including township development, construction of premises, real estate broking services, registered REITs and rent or income on lease not amounting to transfer. See our article on sectors prohibited for FDI.
Serial number 11: industrial parks
Definitions in serial number 11.1
- Industrial Park: a project in which quality infrastructure in the form of plots of developed land or built up space, or a combination, with common facilities, is developed and made available to all the allottee units for industrial activity.
- Infrastructure: facilities required for functioning of the units, including roads, railway line or sidings, water supply and sewerage, common effluent treatment facility, telecom network, generation and distribution of power, air conditioning.
- Common Facilities: facilities available for all units, such as power, roads, water supply, common testing, telecom services, canteens, conference halls, parking, security and training facilities.
- Allocable area: for plots of developed land, the net site area available for allocation to the units, excluding the area for common facilities; for a combination of land and built-up space, the net site and floor area available for allocation excluding the area used for common facilities. For built up space alone, the Gazette prints "the floor area and built-up space utilized for providing common facilities"; readers should confirm that clause against the official text.
- Industrial Activity: manufacturing; electricity; gas and water supply; post and telecommunications; software publishing, consultancy and supply; data processing, database activities and distribution of electronic content; other computer related activities; basic and applied research and development on bio-technology, pharmaceutical sciences or life sciences, natural sciences and engineering; business and management consultancy activities; and architectural, engineering and other technical activities.
Conditions in serial number 11.2
Foreign investment in industrial parks is not subject to the conditionalities applicable for construction development projects in serial number 10, provided the park meets two conditions:
- (a) it comprises a minimum of 10 units and no single unit occupies more than 50 percent of the allocable area;
- (b) the minimum percentage of the area to be allocated for industrial activity is not less than 66 percent of the total allocable area.
A worked example
Ostrava Developments BV invests in two tranches in Nilgiri Townships Private Limited, which is building a residential township in two phases. Each phase is a separate project (condition (a)). Ostrava may exit when a phase is complete or its trunk infrastructure is developed. If it wants to exit and repatriate earlier, each tranche must have completed three years (condition (c)). If instead Ostrava sells its stake to another non-resident without repatriating, no lock-in and no Government approval apply. Nilgiri may sell only developed plots.
Ostrava also funds Udyog Park Private Limited, an industrial park with 14 units, the largest occupying 30 percent of the allocable area, and 70 percent of the area allotted for industrial activity. Both tests in serial number 11.2 are met, so the construction development conditions do not apply.
Need help with a foreign-funded development project?
The lock-in runs tranche by tranche and the real estate line is drawn by a few words. Our Indian subsidiary team sets up the project company and tests the business plan against serial numbers 10 and 11 and paragraph 2(f).
Key takeaways
- Construction development and industrial parks: hundred per cent, automatic route.
- Exit is on completion or after trunk infrastructure; earlier exit with repatriation needs three years for each tranche.
- Transfers between non-residents without repatriation carry no lock-in and need no Government approval.
- The lock-in does not apply to hotels and tourist resorts, hospitals, SEZs, educational institutions, old age homes and investment by NRIs or OCIs.
- Real estate business, farm houses and trading in TDRs are closed; real estate broking is open on the automatic route.
- Industrial parks need at least 10 units, no unit above 50 percent, and 66 percent of allocable area for industrial activity.
Read next
- Schedule I paragraph 2: sectors prohibited for FDI
- Serial number 9 of the Table: civil aviation
- Schedule I paragraph 3(a): automatic route and Government route
- How to set up a foreign subsidiary in India
Disclaimer: Based on the Gazette text of the instrument this article names, as notified and as amended by the notifications named in the article (for the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 the latest amendment consulted is S.O. 4870(E) dated 2 September 2026), as consulted on 2 October 2026. There is no official consolidated text; the provisions were read with each amendment applied. Sectoral caps, entry routes, conditions, forms and time limits change by notification, press note and circular; later changes should be checked on the Gazette, DPIIT and Reserve Bank sites. This article is general information, not legal advice; check the official text before acting.