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The Ministry of Finance has announced that debt financing of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) by Foreign Portfolio Investors (FPIs) would be enabled by making suitable amendments in the relevant legislations.The Ministry of Finance had announced during Union Budget 2021-22 that the Finance Bill has proposed amendments to permit FPIs an entry into debt financing of these emerging investment vehicles. Following up on the announcement, the government is acting to make such investment vehicles attractive and lucrative for investors. The FM proposes to exempt taxes on dividends on InvITs and REITs.The move comes in a bid to increase funds for the real-estate and infrastructure sectors. According to a statement by the Ministry of Finance, 鈥淭he Government of India as part of the Finance Bill, 2021, has proposed amendments in the Securities Contracts (Regulation) Act, 1956 and Securities and Exchange Board of India Act, 1992, with consequential amendments in the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, and The Recovery of Debts Due to Banks and Financial Institutions Act, 1993, to confer the power to Pooled Investment Vehicles (defined to include AIFs, REITs, InvITs, etc) to borrow and issue debt securities.鈥漅EITs and InvITs are relatively new investment instruments in the Indian market. While a REIT comprises a portfolio of commercial real assets, a major portion of which is already leased out, an InvIT comprises a portfolio of infrastructure assets, such as highways and power transmission assets.