Illiquid assets · room 08 of 13
The Indian conditions.
The conditions an Indian real asset has to be structured against, in the order a structure meets them: where the work sits, the entry architecture, title, the approval stack, the regulatory perimeter, and the dispersion between states underneath all of them.
Where complexity arises · Illiquid assets · thirteen rooms
01 · Where the work sits
Where the work sits
Cross-border capital carries three costs a domestic holder does not. Each is structural.
A holder inside the jurisdiction reads the approvals machinery natively, prices without a currency leg, and takes no exchange-control conditions with its entry. Capital arriving from outside carries all three, and none of the three is a market question. Each is a term of the architecture: the entry route and its conditions, the currency and funding channel of every tranche, and the governance that has to work at distance.
That is what the rest sets out. Not whether the exposure is worth taking. That is the manager's question and stays with the manager, but what the exposure has to be built out of once the decision is made.
02 · The entry architecture
Rules
Full ownership, automatic route. Five conditions decide everything after.
Construction development, meaning townships, housing and built-up infrastructure, carries one hundred per cent foreign investment with no approval committee in the way. The conditions attached are few, precise, and decisive. We hold them as a live discipline, from the rules as published, re-read before each entry rather than recalled.
- The route
Automatic, in full. A properly structured entry deploys without a government approval standing between the decision and the money.
- The lock-in
Three years, counted per tranche of investment, not from first close. A staged programme is a staircase of differently dated locks, and most first entries model it wrongly.
- The exit test
Exit follows completion of the project or development of trunk infrastructure: roads, water supply, street lighting, drainage and sewerage. Completion is determined under the municipality's own rules. The definition that releases repatriation is municipal, not contractual.
- The prohibition
Real estate business, dealing in land for profit, is closed to foreign investment, as is trading in development rights. The two routes that sit outside it: develop, or hold for rent. Rental income on lease sits expressly outside the prohibition.
- The phase rule
Each phase of a project is a separate project. Cut wisely, that opens staged exits. Cut carelessly, it strands capital in a phase that never meets the test.
03 · Title
The ground truth
India registers transactions. It does not guarantee titles.
Registration records the deed, not the right, and every purchaser inherits the defects of the chain. Diligence here therefore runs thirty years deep, through revenue records that change name at every state line, through succession, mutation and possession. Paper title and undisturbed possession are separate questions, and the file has to answer both: the opinion from local counsel, the possession from the ground.
An Indian title opinion is a qualified document, given and stood behind by local counsel. The qualifications are read here the way a lender reads covenants, as the actual content, and what they leave standing is priced into the structure before capital commits.
04 · The approval stack
The sequence
Approvals are a programme, and the programme is the interest bill.
Indian consents arrive in a sequence with real dependencies: some serial, some parallel, several discretionary. In an Indian appraisal the sanction programme drives the financing cost, and the financing cost regularly outweighs the construction contingency. That makes the stack below a financial model, not an administrative list.
The stack, in the order it usually binds
- 01Land usetenure conversion and change of use, the discretionary root of the chain
- 02Layout sanctionthe sub-division and layout the later plans must obey
- 03Building plan and commencementthe sanctioned plan, and the certificate that lets work start against it
- 04Environmental clearanceprior, where thresholds trigger it; the stack's most litigated lineWatch
- 05Utilitiespower sanction and load, water sourcing, ground-water permission where drawn
- 06Fire and specialist consentsprovisional at design, final at completion; height and aviation clearances where relevant
- 07Occupation certificatethe statutory gate to lawful use, and the late-stage value leak
- 08Completion certificatethe closure the exit test reads
Single-window portals are real and partial: they compress some steps and leave the dependencies standing. We sequence what is serial, map what is parallel, and name what is discretionary, with an owner and an expected date against every line.
05 · The regulatory perimeter
Enforcement
The regulator publishes the record. That makes it a diligence source, not a background fact.
Escrowed collections, quarterly filings and public abeyance lists are the operating reality of Indian development, and the regulator publishes the compliance record of every counterparty a scheme might sign with. That makes the register a primary diligence source rather than a background one, and it makes filings a reporting line: the specification puts the register beside physical progress, so the party appointed to monitor reads both in the same cycle.
Environmental clearance has been the perimeter's most volatile line. Through 2025 and 2026 the Supreme Court's treatment of retrospective clearance moved more than once, and the position we work to is that prior clearance is mandatory and regularisation survives only as a closed, exceptional route. We hold the citations in the file rather than here, we re-read them before any asset that used a regularised clearance is priced, and the legal position on your facts is your Indian counsel's to state.
06 · The state, not the country
Dispersion
Delivery risk in India is set at the level of the state.
On the government's own monitor of central projects, aggregate cost overrun differs between states by a factor of nine. Public infrastructure is not private development, but the dispersion is the structural point. Approvals discipline, land records and enforcement quality are state variables, and a structure drawn against the country rather than the state has priced a variable it never identified.
The appraisal inputs therefore carry the state, not the flag. Conversion regimes, record quality, court backlogs and the live condition of the local approvals machinery are read per site, because that is where they differ.
07 · A UK counterparty
Standards
A UK counterparty, holding UK standards abroad.
We run from a UK company, and certain UK obligations travel with us wherever we work. The most important is UK bribery law, which reaches our conduct anywhere in the world and allows no exemption for facilitation payments. That is a stricter standard than most regimes ask, and it is held without carve-outs: no payment, no exception. Counterparty diligence to that standard is written into the appointments as a condition of them, and carried out by the parties the manager appoints.
Everything else is governed by the law of the place. The asset, the title, the consents and the transaction are Indian, and Indian counsel owns them. Where the two bodies of obligation meet, the boundary is drawn as six fixed lines, at the lines.
We are an independent specialist transaction-architecture firm. The positions above are structural; the legal, tax and regulatory positions on any set of facts are taken by the manager's own appointed advisers, each within its own permissions.
Where complexity arises · 6 minute readThe Indian lexiconThe working vocabulary of Indian development as it is used in files. Entry and exchange control, land and title, consents and delivery, regulation and reporting.
Where complexity arises · 20 minute readIlliquid assetsEntry routes, the holding chain, title read before capital commits, the mechanism staged funding is released by, and the constraints that bite only on the illiquid.
Where complexity arises · 5 minute readThe three sectorsThree Indian sectors, read as structural problems. What binds the programme in each, and what the entity chain and the drawdown test have to carry as a result.