Press Note 2 not to apply to hotels

NEW DELHI: The government on Wednesday said provisions of Press Note 2 (2005 series), which allowed 100 per cent foreign direct investment in townships, housing and construction projects, will not apply to hotels, hospitals and special economic zones.

"FDI up to 100 per cent was already allowed under the automatic route in hotel and tourism sector vide Press Note 4 (2001 series) and in the hospital sector vide Press Note 2 (2000 series)," the Commerce Ministry said in a release.

Special Economic Zones are separately regulated under the SEZ Act, 2005, it added.

The clarification came after queries from investors on the applicability of Press Note 2 (2005 Series), which was announced in March last year. With this notification, the government had allowed 100 per cent FDI in townships, housing, built-up infrastructure and construction-development projects.

Establishment and operation of hotels and hospitals would continue to be governed by Press Note 4 (2001 series) and Press Note 2 (2000 series) respectively, the ministry said.