India's Real Estate Sector: Ready for Global Competitiveness?

India's real estate sector has undergone significant legal and regulatory reforms, aiming to enhance transparency, accountability, and investor confidence. As the country looks to become a developed economy, the real estate sector plays a pivotal role.

Real EstateReraIbcDigitizationLand RecordsReal Estate NewsJul 29, 2025

India's Real Estate Sector: Ready for Global Competitiveness?

Real Estate News:For years, India’s real estate and infrastructure sector has thrived on rapid growth, but the absence of a clear, stringent legal framework and regulatory safeguards has led to delays, buyer vulnerabilities, and investor hesitation. A lack of effective implementation and enforcement mechanisms compounded these issues, creating distrust between end-users and investors.

Over the past decade, the real estate landscape has undergone a significant transformation. Key legal reforms have driven this change, including the Real Estate (Regulation & Development) Act, 2016 (RERA), the Insolvency and Bankruptcy Code, 2016 (IBC), and the Consumer Protection Act, 2019. The digitization of land records has also played a crucial role. Together, these initiatives brought transparency, accountability, and structured practices, boosting customer and investor confidence. The result is a stable, investor-friendly, and future-ready real estate ecosystem.

As India aims to become a developed economy by 2047, real estate and infrastructure remain pivotal. The sector currently contributes nearly 7% to India’s GDP and is projected to reach $1 trillion by 2030, accounting for around 15% of GDP. The government’s emphasis has been on transparent governance, ease of doing business, and clear policy frameworks, such as the Smart Cities Mission, which has strengthened the sector’s growth trajectory.

The enactment of RERA in 2016 marked a watershed moment for the Indian real estate sector. It addressed customer concerns regarding project delays, opaque transactions, and limited legal recourse. RERA mandates project registration, penalizes developer defaults, and empowers homebuyers via dedicated Real Estate Regulatory Authorities in each State. Crucially, it also provides developers with mechanisms to address defaults by buyers. As per the Economic Survey 2024-25, RERA has been notified in all States and Union Territories except the State of Nagaland. As of January 6, 2025, 1.38 lakh real estate projects and 95,987 agents are registered, with 1.38 lakh complaints heard and disposed of by regulatory authorities.

A landmark 2019 Hon’ble Supreme Court ruling upheld homebuyers’ rights under IBC, allowing them to initiate insolvency proceedings against defaulting builders. The Hon’ble Supreme Court has affirmed that RERA and IBC must coexist, and in case of conflict, IBC prevails. RERA has been successful in securing the rights of the allottees-customers-buyers-investors, rationalizing and streamlining processes and documentation, and with more transparency and accountability. The documentation has been standardized, and norms made clear, penalties being rationalized for both buyers and developers.

IBC provides a structured mechanism for real estate insolvency, offering a lifeline to stalled projects. High-profile cases show homebuyers can collectively join resolution frameworks to complete delayed or abandoned projects, setting precedents. However, balancing the rights of financial creditors, homebuyers, and operational creditors remains a challenging and often protracted legal process. IBC continually evolves, with regulatory tweaks from the Insolvency and Bankruptcy Board of India (IBBI) aiming to preserve the real estate sector's commercial viability.

Ambiguity in Indian land titles has long hampered real estate. The Digital India Land Records Modernization Programme (DILRMP) seeks to establish a transparent, real-time land records system, aiming to reduce disputes, discrepancies, and fraud by eliminating physical visits and facilitating data sharing. Complementary initiatives like the SVAMITVA scheme further formalize property ownership in rural and semi-urban areas through drone mapping, opening new development corridors and boosting the sector's efficiency.

The Goods and Services Tax (GST) simplified the previously complex tax regime for real estate. Though initially criticized for increasing costs, GST rate rationalization and the removal of input tax credit in certain residential segments have stabilized the market. The Pradhan Mantri Awas Yojana (PMAY) is a cornerstone of the government's affordable housing initiative. The Union Budget 2025–26 has allocated ₹19,794 Crores to PMAY, boosting housing for economically weaker sections.

Real estate is increasingly integrating technology, with AI-driven marketing and customer engagement on the rise. Consequently, compliance with the Digital Personal Data Protection Act, 2023 has become essential. This law enforces consent frameworks, data minimization, and robust protection mechanisms, making legal compliance vital for tech-enabled real estate businesses.

Despite these reforms, challenges persist. RERA implementation varies across States, with many yet to establish fully functional Real Estate Appellate Tribunals (REATs), envisioned as fast-track courts for buyer grievances. Capacity issues and procedural inefficiencies often cause delays, and awareness of rights under RERA remains low, especially in Tier II and III cities. Furthermore, the Hon’ble Supreme Court has provided critical interpretations of the RERA and State-level rules, clarifying the legal contours for both developers and buyers.

If these goals are achieved, India’s real estate sector will not only expand in size but also mature in terms of stability, integrity, and global competitiveness.

Frequently Asked Questions

What is RERA and why is it important?

RERA, or the Real Estate (Regulation & Development) Act, 2016, is a regulatory framework that mandates project registration, penalizes developer defaults, and empowers homebuyers. It addresses issues like project delays and opaque transactions, enhancing transparency and accountability in the real estate sector.

How does the Insolvency and Bankruptcy Code (IBC) impact the real estate sector?

The IBC provides a structured mechanism for real estate insolvency, allowing homebuyers to initiate insolvency proceedings against defaulting builders. It offers a lifeline to stalled projects and balances the rights of financial creditors, homebuyers, and operational creditors.

What is the Digital India Land Records Modernization Programme (DILRMP)?

DILRMP is a government initiative aimed at establishing a transparent, real-time land records system. It seeks to reduce disputes, discrepancies, and fraud by eliminating physical visits and facilitating data sharing, thus improving the efficiency of the real estate sector.

How has GST impacted the real estate sector?

The Goods and Services Tax (GST) simplified the tax regime for real estate by rationalizing rates and removing input tax credit in certain residential segments. Initially criticized for increasing costs, it has since stabilized the market and improved transparency.

What is the Pradhan Mantri Awas Yojana (PMAY)?

The Pradhan Mantri Awas Yojana (PMAY) is a government initiative aimed at providing affordable housing. It has been allocated significant funds in the Union Budget 2025–26 to boost housing for economically weaker sections and improve the overall real estate landscape.