Commerce and Industry Minister Anand Sharma said that the Cabinet will soon take a view on liberalising foreign direct investment (FDI) policy in railways sector. The department of industrial policy and promotion (DIPP) has proposed to allow 100 per cent FDI in high-speed train systems, suburban corridors, high-speed tracks and freight lines connecting ports and mines. However, existing passenger and freight network operations will not be opened to foreign investors.
At present, there is a complete ban on any kind of FDI in the railways sector except mass rapid transport systems.
As per the proposal, foreign companies would be allowed to pick up 100 per cent stake in the special purpose vehicle that will construct and maintain rail lines connecting ports, mines and industrial hubs with the existing rail network. However, the home ministry and the department of economic affairs have sounded a note of caution on the proposal, citing security concerns, especially with regard to investments from China in this sensitive sector.