The government has clarified that such complexes will fall under the automatic route with foreign direct investment up to 100 % in hotel and tourism sector including construction and establishment of cinemas. The sector is exempt from applicability of Press Note 2 (2005) related to construction development projects.

FDI norms for construction development projects pertain to real estate and include housing, commercial premises,
resorts, educational institutions, recreational facilities, city and regional level infrastructure, townships.

A grey area had arisen because the current FDI policy does not directly address whether owning, developing, constructing and managing a multiuse shopping entertainment and commercial complex including multiplex theatres would be categorised as real estate or not.

This follows an investment proposal by the Essel group to develop 45 family entertainment centres in smaller cities across the country. To be developed under E-City Ventures, the project size is $453 million and the company will raise $ 145 million through FII placements.