The Department of Industrial Policy and Promotion (DIPP), an arm of the Ministry of Commerce & Industry, has revised a proposal for 100 per cent foreign direct investment (FDI) in railways.

The proposal has been revised due to concerns regarding Chinese firms potentially investing in projects near the international border with the Asian powerhouse. After revising the proposal, the DIPP has now proposed setting up of a core group with requisite technical and security expertise under the Ministry of Railways, to evaluate FDI proposals in the sector, to address national security concerns.

Futher, the department has submitted to the Cabinet for approval, the proposal for 100 per cent FDI in railway transport, such as elevated rail corridor projects, freight terminals, suburban corridors, dedicated freight lines and high-speed train systems, to meet the urgent need to modernize and expand the railway network, which requires large capital investments.

The proposal does not require approval from the Foreign Investment Promotion Board. An approval from the railways ministry will suffice, according to the original proposal.