Ernst & Young'sRahul Rai

When people think of India, technology and off-shoring come to mind; but there is much more going on in the country these days. According to a report by Ernst & Young, the government has been easing regulations previously used to restrict foreign direct investment in India. In March, the government revealed a liberalized set of guidelines for FDI in real estate, essentially opening up all property sectors. At first, this new policy is expected to spur joint-venture developments between Indian and foreign developers; however, solo foreign projects should begin to pop up as outside developers gain knowledge of the Indian market, the report adds. The FDI figure is projected to hit US $15 billion this year–triple the amount of 2004–and India has surpassed Mexico as the third most preferred country for foreign investment. Rahul Rai, associate director of transaction and advisory services at Ernst & Young India, spoke to GlobeSt.com about where the real estate market has been the past 10 years and where it is headed.

GlobeSt.com: When did the IT and offshoring boom start?

Rai: The IT boom itself started in the ’90s and one of the major drivers was the Y2K problem. A lot of Indian companies specialized on finding solutions. Post 2000, that manpower became free and was competent enough to go into other areas of IT. Offshoring is also a ’90s phenomenon. It has gathered momentum since 2000 but there where a lot of developments before that, like GE setting up its center in India.