The Indian Government has notified the permit of 100% foreign direct invest (FDI) in railways, in a bid to boost the sector’s infrastructure in the country.
The liberalised norms in railways come after the government announced a relaxation of 49% FDI in the defence sector from the existing 26%.
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The Indian Ministry of Commerce and Industry stated that the restructured policy allows direct private investment in sectors that include suburban corridor projects through PPP, dedicated freight lines, rolling stock including train sets, locomotives manufacturing and maintenance facilities.
Additional areas include railway electrification and signalling systems, freight terminals and passenger terminals and mass rapid transport systems.
However, the ministry noted that proposals involving FDI beyond 49% in ‘sensitive areas from security point of view’ will be brought before the cabinet committee for consideration on a case-to-case basis.
The definitions of ‘infrastructure’ and ‘common facilities’ have also been revised through this notification, by including electrified tracks and connectivity to main railway line.
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By GlobalDataA Department of Industrial Policy and Promotion official said: "We have done our bit and liberalised the FDI policy."
This relaxation in railways is believed to largely attract investments from China and Japan.
