M A I N   N E W S

FDI in Defence, Railways okayed
Tribune News Service

New Delhi, August 6
The Union Cabinet today approved the proposal for raising FDI limit in Defence from 26 per cent to 49 per cent and fully opened up the Railways for the foreign investment. The two proposals were cleared by the Cabinet at a meeting chaired by Prime Minister Narendra Modi.

The decision has come after the Department of Industrial Policy and Promotion (DIPP) sorted out strategic concerns raised by the Home Ministry on easing the FDI rules in the two sectors.

In Railways, the proposal is to allow up to 100 per cent FDI in infrastructure projects such as high-speed train systems, suburban corridors and dedicated freight line that are to be executed under public-private partnership (PPP) mode. Currently, there is a complete restriction onany kind of FDI in railway projects except in mass rapid transport systems.

The FDI liberalisation in the sector would help in modernisation and expansion of the Qrailway projects.

According to estimates, the sector is facing a cash crunch of around Rs 26,000 crore. However, FDI is not proposed to be allowed in train operations and safety.

The Home Ministry had expressed concerns that there might be security-related issues for projects in strategic border areas. Reports said that for such projects, prior permission of the Foreign Investment and Promotion Board and clearance from the Home Ministry would be sought. In Defence-related projects, the proposal to increase FDI limit would be vetted by a Cabinet committee on security.