The government recently offered clarifications with respect to provisions of Press Note 2 (2005 series). It stated that these provisions which allowed 100% foreign direct investment in townships, housing, built-up infrastructure and construction-development projects, will not apply to hotels, hospitals and special economic zones.

The Commerce Ministry pointed out that FDI up to 100% 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). Besides Special Economic Zones are separately regulated under the SEZ Act, 2005.

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.