The Department of Industrial Policy and Promotion (DIPP) after receiving certain references on the issue as to whether entering into facility share agreements through leasing/sub-leasing arrangements within group companies for the larger purposes of business activities would be construed to mean ‘real estate business’ within the provisions of Consolidated FDI Policy Circular of 2015 has clarified by a circular dated September 15, 2015 that Facility sharing arrangements between group companies through leasing/sub-leasing arrangements for the larger interest in business will not be treated as ‘real estate business’ within the provisions of Consolidated FDI Policy Circular of 2015, provided such arrangements are at arm’s length price in accordance with relevant provisions of Income Tax Act 1961, and annual lease rent earned by the lessor company does not exceed 5% of its total revenue.