Proposal for Japanese FDI in DMIC project gets MEA nod

The draft Cabinet proposal to give 26% stake to Japan in the $90 billion Delhi-Mumbai Industrial Corridor (DMIC) project has received an approval from the Ministry of External Affairs, sources said.

The ambitious DMIC project being piloted by the Industry Ministry envisages establishment of several industrial cities across seven northern and western states.

"MEA has approved the draft Cabinet proposal of the Department of Industrial Policy and Promotion [DIPP] to give 26% stake to the Japanese," an official said.

Japan has evinced interest in picking up the equity stake which will be offloaded by the Infrastructure Development Finance Company (IDFC) and Infrastructure Leasing and Financial Services (IL&FS) at the instance of the government, sources said.

 

The two private players together hold 51% stake in the DMIC Development Corporation (DMICDC), a special purpose vehicle for implementing the project. It involves building of  industrial enclaves along the Delhi-Mumbai rail corridor, spanning Uttar Pradesh, Haryana, Rajasthan, Gujarat, Maharashtra and Madhya Pradesh.

In September, Cabinet had approved equity restructuring of DMICDC and an expenditure of Rs 18,500 crore on development of infrastructure.The project is considered vital for the recently cleared National Manufacturing Policy.

The government plans to give some equity in the SPV to state-run financial institutions like LIC and HUDCO. The Finance Ministry will take the final decision on the players to be inducted, sources said.