FDI Policy and Licensing in IndiaтАЩs Hotel & Hospitality Industry
Investing in Tourism and Hospitality: The Regulatory Guide
The hospitality sector in India is one of the primary targets for foreign capital. The Government of India allows liberal foreign direct investment (FDI) policies alongside structured licensing rules for hotels and resorts.
1. 100% FDI under Automatic Route
Foreign investors are allowed to hold up to 100% equity in hospitality and tourism projects under the automatic route. This includes the construction of hotels, resorts, convention centers, and tourist accommodation facilities.
2. Critical Licenses and Approvals
Developing and operating a hospitality unit requires a multi-agency approval process:
- Land-Use Conversion: Approval from local development authorities to convert agricultural land into commercial use.
- FSSAI License: Registration under the Food Safety and Standards Authority of India for serving food and beverages.
- Bar and Liquor Licenses: Obtained from the state excise department. Rules vary significantly between states.
- Environmental CTO: Consent to Operate from the State Pollution Control Board to verify waste management compliance.
Dinesh Prasad Tiwari & Associates advises global hotel brands on joint venture structures, lease deeds, franchise agreements, and local licensing compliance.