India's real estate regulatory system has tightened substantially. Recent amendments affecting foreign ownership, property transfer procedures, and project registration have taken effect across multiple legislative instruments. Foreign nationals, overseas corporate entities, and non-resident investors holding or acquiring property in India now face stricter disclosure, approval, and compliance obligations than at any point in the past decade.
India's updated real estate legislation and accompanying Reserve Bank of India (RBI) guidelines impose new approval requirements on foreign property owners and foreign direct investment channels into Indian real estate. Affected parties must complete mandatory disclosures and, where applicable, obtain prior regulatory clearance before executing any property transfer. Compliance deadlines vary by ownership category but generally fall within 90 days of the amendment's effective date.
This alert explains what has changed, which business and individual categories are directly affected, and the five immediate actions that foreign property owners and their advisers should take now.
What has changed – the regulatory development and effective date
India's real estate legislative regime operates across several intersecting bodies of law: investment legislation governing foreign direct investment routes, RBI regulations on external commercial borrowings and repatriation. Real Estate (Regulation and Development) Act (RERA) rules at the state level. Additionally, broader corporate legislation including the Companies Act 2013. Recent amendments have moved on all four fronts simultaneously.
The most significant shift concerns the tightening of foreign direct investment conditions for the construction and real estate development sector. Regulators have narrowed the categories of projects that qualify for the automatic approval route. Projects below prescribed thresholds for built-up area and minimum capitalisation no longer qualify for automatic clearance. They now require prior approval from the relevant government authority.
In parallel, the RBI has updated its guidelines on repatriation of sale proceeds. Foreign nationals and overseas entities that acquired property in India under earlier, more permissive rules must now re-verify their repatriation eligibility. Any property transfer – including sale, gift, or inheritance transfer – triggers a fresh compliance assessment under the revised rules.
At the state level, RERA amendments in several major states have extended mandatory project registration requirements. Developer obligations now reach a wider class of mixed-use and commercial developments. Foreign investors holding equity in registered developers are directly exposed to these extended obligations.
The Securities and Exchange Board of India (SEBI) has also issued updated guidance on real estate investment trusts (REITs), affecting foreign portfolio investors who hold REIT units as a proxy for real estate exposure. New concentration limits and enhanced due diligence requirements apply at the unit-holder level.
Effective date: the core FDI and RBI amendments entered into force in the first quarter of 2025. State-level RERA amendments vary by state, with the majority effective between January and March 2025. The SEBI REIT guidance applies from the date of notification, which occurred in late 2024 for the majority of provisions.
For a detailed overview of how these changes interact with property acquisition and conveyancing procedures in India, see our real estate advisory services for India.
Who is affected – threshold criteria and compliance deadlines
The amendments affect four distinct categories of foreign property stakeholders. Each category carries its own threshold criteria and compliance deadline.
Foreign nationals and non-resident Indians (NRIs) holding residential or commercial property. Any individual who acquired property in India under the automatic approval route and now seeks to transfer. Mortgage. Alternatively, repatriate proceeds must re-confirm compliance under the revised RBI framework. The compliance review must be completed before the property transfer is executed. Failure to obtain the requisite clearance renders the transfer voidable under investment legislation.
Foreign corporate entities with direct real estate holdings. Overseas companies that hold title deeds to Indian property. typically through a liaison or branch structure established prior to current restrictions. must assess whether their holding structure remains permissible. Where it does not, a restructuring or divestment plan must be submitted to the relevant authority within 90 days of the amendment's effective date applicable to their state.
Foreign investors in Indian real estate development companies. Investors holding equity stakes in companies registered under corporate legislation (Companies Act 2013) and engaged in construction or development must verify that the investee company's projects continue to meet the revised FDI eligibility thresholds. Projects that fall below the new area or capitalisation minimums require the investor to obtain a specific approval before further capital deployment.
Foreign portfolio investors holding REIT units. Investors whose REIT unit holdings exceed the revised concentration limits under SEBI regulations must reduce their position to the permitted threshold within the prescribed window. generally 180 days from the notification date. Exceeding the limit without a reduction plan filed with SEBI triggers reporting obligations and potential enforcement action.
A common misconception is that property held through an Indian subsidiary insulates the foreign shareholder from these requirements. It does not. Indian corporate legislation and investment rules look through the subsidiary structure in a range of scenarios, particularly where the foreign entity exercises control or where the property represents a dominant share of the subsidiary's assets.
Disputes arising from non-compliant transfers or contested title may be referred to adjudication under the Arbitration and Conciliation Act, which governs both domestic and international arbitration seated in India. The National Company Law Tribunal (NCLT) retains jurisdiction over corporate restructuring matters involving real estate-holding entities. Engaging a lawyer in India with cross-border regulatory experience is strongly advisable before any compliance assessment is finalised.
To receive an expert assessment of your India real estate exposure under the revised regulatory rules, contact us at info@ferrazwhitmore.com.
What to do now – immediate actions and timeline
Foreign property owners and investors should treat the next 60 days as a priority window. The five actions below address the most urgent compliance requirements.
1. Audit existing title deeds and ownership structures. Compile a complete register of all Indian property interests: direct holdings, beneficial interests through Indian entities, and REIT positions. Verify that each title deed accurately reflects the current ownership structure and that the land register entry is consistent with internal corporate records. Discrepancies between registered title and actual beneficial ownership are a primary trigger for regulatory scrutiny during property transfer.
2. Assess repatriation eligibility under the revised RBI framework. For any property that may be sold or transferred in the next 12 months, obtain a formal assessment of repatriation eligibility before heads of terms are agreed. The assessment must account for the original acquisition route, the holding period, the source of acquisition funds, and any changes to the foreign investor's residency or entity status since acquisition. Attempting to repatriate proceeds without this confirmation risks the funds being blocked at the remittance stage.
3. Review FDI compliance for development company investments. Where the foreign interest is held through equity in a development company, conduct a project-by-project due diligence review against the revised area and capitalisation thresholds. Document the outcome. If any project no longer qualifies under the automatic route, instruct counsel to prepare a prior approval application immediately – processing times are typically eight to twelve weeks.
4. File updated declarations with the RBI and relevant state RERA authority. Revised disclosure forms must be filed to reflect any changes in ownership, control, or project status arising from the amendments. Missing a declaration deadline is treated as a compliance failure even where the underlying investment is substantively permissible. The notarial deed requirement for property transfer in India also means that a conveyancing lawyer must confirm the declaration status before any deed is executed.
5. Reassess dispute resolution provisions in existing agreements. Any shareholder agreements, joint venture arrangements, or lease agreements relating to Indian real estate should be reviewed in light of the amended legislative regime. Where disputes have already arisen or are anticipated, assess whether the Arbitration and Conciliation Act or NCLT jurisdiction applies. For international investors, the interaction between Indian arbitration law and cross-border enforcement considerations – including under the tax treaty network – is a material factor. For the tax implications of restructuring or exiting Indian real estate positions, see our analysis of tax advisory for India.
Comparable regulatory tightening has occurred in other high-growth markets. For context on parallel developments in the Gulf region, our alert on real estate regulation changes in the UAE sets out the key differences and common cross-border implications for multi-market investors.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our real estate practice covers property acquisition, due diligence, title deed verification, property transfer, and regulatory compliance for foreign investors operating in India and across the Asia-Pacific region. We combine Portuguese civil law expertise with English common law tradition to deliver cross-border legal solutions for international entrepreneurs, institutional investors, and in-house legal teams. As an international law firm in India-focused cross-border matters, we work with clients who need results-oriented counsel at the intersection of Indian investment legislation, RBI regulations, and multi-jurisdictional structuring. The firm's real estate team includes practitioners with experience before the NCLT and in matters governed by the Arbitration and Conciliation Act. To discuss your India real estate compliance position, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.