Commerce and Industry Minister Anand Sharma on Wednesday exuded confidence that the Cabinet will soon take a view on liberalising FDI policy in railways sector. "All the concerned stakeholders including the Railways Ministry are on board. I hope this will happen soon," Sharma told reporters in New Delhi.
The Department of Industrial Policy and Promotion (DIPP) has proposed to allow 100 per cent Foreign Direct Investment (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. In its comment on the proposal of the DIPP, according to sources, the Home Ministry has said that Chinese investments in such a sensitive sector should be viewed with caution.
The Home Ministry, they said, has pointed out that China is India's main rival on the economic and military fronts, with unresolved border disputes between the two nations.
Sharma also expressed hope that the cabinet would soon take up view of relaxing FDI norms in construction sector. The DIPP has proposed easy conditions for exit for developers before the three-year lock-in period among other changes.
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