Govt notifies FDI liberalisation in Railways

However, proposals involving FDI beyond 49% in sensitive areas will be placed before the Cabinet Committee on Security for approval by the Railway Ministry

The government today notified the liberalised FDI norms for the Railways, permitting 100% foreign direct investment through automatic route in several areas, including high speed trains.

Other segments of the Railways in which FDI will 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.

However, proposals involving FDI beyond 49% 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, said a press note of the Department of Industrial Policy and Promotion (DIPP).

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

The FDI liberalisation in the sector would help in modernisation and expansion of railway projects. However, FDI will not be allowed in train operations and safety.

Earlier, FDI was allowed only in Mass Rapid Transport (MRT) systems.

According to estimates, the sector is facing a cash crunch of around Rs 29,000 crore and allowing of FDI will help mop up resources.