The Ministry of Home Affairs has given the green signal for permitting foreign direct investment (FDI) in railways.

The approval will soon be considered by the Cabinet Committee on Economic Affairs (CCEA). The department of industrial policy & promotion (DIPP) has already prepared a draft Cabinet note. By the final Cabinet note, the government will allow foreign players to invest only in construction and maintenance of railway projects, not in operations. As a result, 100 per cent FDI might be allowed in this case.

In August 2013, DIPP had proposed granting of FDI in railways. It had advised that upto 100 per cent FDI should be allowed in dedicated freight corridors and high speed railway networks falling under the fixed line category. And, upto 74 per cent should be allowed in the case of collaborations and joint ventures in other areas.

At present, FDI is not accorded in railway transport other than mass rapid transport systems and component manufacturing.