India opens up its rail sector to foreign investment

On 6 August, the Union Cabinet of India approved 100 per cent foreign direct investment (FDI) in railway infrastructure. The proposal was originally introduced in the Railway Budget that was tabled in the Indian Parliament on 8 July.

The current rules, as they stand, do not permit FDI in the railways. Under the approved proposals, 100 per cent FDI would be allowed in railway infrastructure via the automatic route, i.e. without prior government approvals. The proposals are likely to allow for FDI in the following categories in the railway sector in India: high-speed rail projects; dedicated freight corridor; port connectivity; passenger and freight terminals; signalling systems; electrification; and manufacturing and maintenance of rolling stock.

However, the FDI is restricted to railways infrastructure only and it does not extend to train operations. It is expected that the railways minister of India will introduce a bill in the Indian Parliament soon to amend the current rules in line with the proposals approved by the Union Cabinet…

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