The government notified the liberalised FDI norms for the railways, permitting 100 per cent 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, Port and mining connectivity projects through different modes, locomotives/coaches manufacturing and maintenance facilities, railway electrification, signalling systems, freight terminals, passenger terminals and infrastructure in industrial parks like railway line/sidings.
It has also allowed up to 100 per cent FDI allowed in most cases in rail projects like gauge conversion, construction of new lines, doubling of new lines and maintenance PPP projects. 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, 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 connectedness to the main railway. 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. This move is likely to find favour with countries like Japan and China, what are interested in investing mega-projects.