Mixed signals may delay higher FDI in Indian Railways

23 Dec 2013

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The government's plan to permit 100 per cent foreign direct investment (FDI) in the Indian Railways may be delayed, as the industry ministry has asked the railway ministry for greater clarity on the scope of the policy and the route for bringing in the foreign investment, according to a report in BusinessLine.

This seems for now to have put paid to another report today which says the industry ministry itself has prepared a proposal to allow 100 per cent FDI in the railways, which will be presented to the union cabinet for approval in a final push for economic reform before this government's term ends next year.

Under the ministry's proposals, 100 per cent FDI will be allowed in fixed line projects such as freight corridors and high speed rail networks. In case of joint ventures, FDI of up to 74 per cent will be permitted in the sector. ''It is expected to be taken to the cabinet for approval in the new year," The Indian Express cited a senior government official.

However, BusinessLine quoted an official in the Department of Industrial Policy & Promotion (DIPP) as saying, ''The railway ministry's response to the draft cabinet note is confusing and leaves a lot of room for interpretation regarding the route through which it wants the investments to come (in from) and the areas that it wants to open up.''

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