Liberalised Norms for FDI in Rlys Notified

The sector is facing a cash crunch of around Rs 29,000 cr and FDI will help mop up resources.

Published: 28th August 2014 06:00 AM  |   Last Updated: 28th August 2014 08:42 AM   |  A+A-

Rlys

NEW DELHI: The government on Wednesday notified the liberalised foreign direct investment (FDI) norms for Indian Railways, permitting 100 per cent foreign direct investment through automatic route in several areas, including high speed trains.

However, proposals involving FDI beyond 49 per cent in sensitive areas, from security point of view, will be placed before the Cabinet Committee on Security (CCS) for approval by the Railway Ministry on a case-to-case basis, a statement to the press issued by the Department of Industrial Policy and Promotion (DIPP) said.

The other areas where FDI would be allowed include suburban corridor projects through Public Private Partnership (PPP), dedicated freight lines, rolling stock including train sets, locomotives/coaches manufacturing and maintenance facilities, railway electrification, signalling systems, freight terminals, passenger terminals and infrastructure in industrial parks like railway line/sidings.

Further, definitions of ‘infrastructure’ and ‘common facilities’ have also been widened to include railway line or sidings (electrified railway lines and connectiveness to the main railway line).

For the funds starved and highly subsidised Indian Railways a liberalized FDI regime will help the sector’s modernisation and expansion and would also lead to completion of several projects that have been pending for want of funds. According to estimates, the sector is facing a cash crunch of around Rs 29,000 crore and FDI will help mop up resources.

However, FDI will not be allowed in train operations and safety. Earlier, the foreign direct investment was allowed only in Mass Rapid Transport (MRT) systems.

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