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increasing demand for hotels/resorts across India, offers yet another opportunity for real
estate development.
Hospitality industry is witnessing significant changes in its dynamics with increase in
tourists and business travel to India. As per the World Travel and Tourism Council (WTTC),
India ‘s Travel and Tourism is expected to grow 8.4 % in 2006 and by 8 % per annum, in real
terms, between 2007 and 2016. WTTC has also projected India as one of the emerging
tourism markets having potential of earning US$24 billion annual foreign exchange through
tourism by 2015. With the industry expected to grow at 8-9% in 2006, the number of
business travelers to the country are also likely to increase.
(Source: Central Statistical Organisation).
The majority of segments in the Indian hotel industry have shown robust recent growth in
room rates as well as occupancy rates. With increased demand and limited availability of
quality accommodation, the average room rates in metropolitan markets have grown at a
rapid pace over the last two years. The general increase in room rates and occupancy rates
is expected to contribute significantly to the demand for new hotel developments.
(e) SEZs
SEZs are specifically delineated duty free enclaves deemed to be foreign territories for
purposes of Indian custom controls, duties and tariffs.
Under the SEZ Act, a Board of Approval (the “SEZ Board”) has been set up, which is
responsible for promoting SEZs and ensuring their orderly development. The SEZ Board has
the authority to approve proposals for the establishment of SEZs, the operations to be
carried out in the SEZs by developers and the scope of foreign collaborations and FDIs.
According to the Ministry of Commerce and Industry, 61 SEZs are currently approved and
under establishment in India. The currently functional SEZs in India are located at Andheri
(East) (Maharashtra), Cochin (Kerala), Kandla and Surat (Gujarat), Chennai (Tamil Nadu),
Visakhapatnam (Andhra Pradesh), Falta (West Bengal), Noida (Uttar Pradesh), Manikanchan
and Salt Lake (Kolkata), Indore (Madhya Pradesh), Jaipur (Rajasthan) and Mahindra City
(Chennai) (Ministry of Commerce and Industry, Department of Commerce
(http://sezindia.nic.in)). As of March 31, 2005, there were 811 units, employing over a
100,000 people, in operation in the eight SEZs. Investment by the units in these zones is in
the order of Rs. 18 billion. SEZs, by virtue of their size, are expected to be a significant
new source of real estate demand.
Further, SEZ developers are also eligible for tax benefits under Section 80-IA of the Income
Tax Act, pursuant to which they are eligible to avail themselves of tax exemptions for a
block of 10 years in a 15 year period at the option of the relevant developer. In addition,
developers may import/procure goods without paying duty for the development, operation
and maintenance of the SEZ.
2. Automobile Industry
• Industry growth rate is estimated to be 26%(2003-04)
• At the end of 2010 – 20 lac 4--wheelers will be on Indian roads
• Passenger car segment is the fastest growing (28.5% - 2003-04).
Compact car segment – 23% growth in 2003-04
Mid-Size Segment – 51% growth in 2003-04
Small Car Segment – 38% growth in 2004
Passenger Utility vehicles and multipurpose vehicles – 27.3% growth in
2003-04
• Exports of passenger cars in 2003-04 accelerated to 80% over 2002-03
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