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Real Estate: Feb 2011

February, 2011

The Indian real estate industry is expected to be valued at US$ 180 billion (INR 8,640 billion) by 2020. The real estate sector in India is on a rapid growth trajectory. The real estate sector is a key growth driver of the country’s economy. The contribution of the residential segment alone to India’s gross domestic product (GDP) is around 5 to 6 per cent. India has one of the largest number of retail outlets in the world.

In a short span of time, the industry has evolved from a highly fragmented and unorganised market into a semi-organised market, with a large number of listed companies. With India emerging as a preferred destination for medical treatment, medical tourism in the country is expected to grow at 29 per cent to reach US$ 2.4 billion by 2012.

In the organised retailing segment, the demand for quality mall space has increased with the entry of international retailers in India. The share of organised retail in the total Indian retail trade pie is projected to grow at 40 per cent per annum. Real estate activity is becoming geographically de-concentrated from large metros —Bengaluru, Chennai, Mumbai and NCR—to tier-II and tier-III cities (cities such as Chandigarh, Chennai, Jaipur, Pune, Hyderabad, Kochi and Visakhapatnam).

In the last decade, foreign domestic investments (FDI) in real estate, has increased due to the growing interest of foreign players in the Indian market. The real estate sector is one of the highest FDI-attracting sectors in India, with recorded FDI inflow of more than US$ 8.9 billion (INR 403 billion) between April 2000 and September 2010. FDI of up to 100 per cent is allowed under the automatic route in most asset classes.

Sectoral Presentation (November 2010)

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