From the times where no
investment (domestic or foreign) was allowed in rail transport sector during
the Industries (Development and Regulation) Act, 1951 era, to one where Indian
railways have now been opened up to private sectors including foreign
investment up to 100% under the automatic route marks an important reform in
the legal regime to be worthy of attention. The Department of Industrial Policy &
Promotion, Government of India (“DIPP”)
vide notification no. S.O. 2113 (E), dated 22nd August, 2014 (“Notification”) has reviewed its policy
for private investment in rail infrastructure and amended the list of
industries reserved for the public sector under item no. 8 of Schedule I of the
principal notification no. S.O. 477 (E) dated 25th July, 1991. Accordingly,
the said Notification provides for the permitted scope of business for private
sector as follows:
investment (domestic or foreign) was allowed in rail transport sector during
the Industries (Development and Regulation) Act, 1951 era, to one where Indian
railways have now been opened up to private sectors including foreign
investment up to 100% under the automatic route marks an important reform in
the legal regime to be worthy of attention. The Department of Industrial Policy &
Promotion, Government of India (“DIPP”)
vide notification no. S.O. 2113 (E), dated 22nd August, 2014 (“Notification”) has reviewed its policy
for private investment in rail infrastructure and amended the list of
industries reserved for the public sector under item no. 8 of Schedule I of the
principal notification no. S.O. 477 (E) dated 25th July, 1991. Accordingly,
the said Notification provides for the permitted scope of business for private
sector as follows:
Construction, operation and maintenance of the
following:
following:
- Suburban corridor
projects through PPP, - High speed train
projects, - Dedicated freight
lines, - Rolling stock
including train sets, and locomotives/ coaches manufacturing and
maintenance facilities, - Railway
Electrification, - Signaling systems,
- Freight terminals,
- Passenger terminals,
- Infrastructure in
industrial park pertaining to railway line/sidings including electrified
railway lines and connectivities to main railway line and - Mass Rapid Transport
Systems.
Accordingly, it has been decided to permit FDI in
the aforementioned activities of the railway transport sector and the
amendments are made in the “Consolidated FDI Policy Circular of 2014” (“the FDI Policy”) vide Press Note no. 8
(2014 Series) dated 27th August, 2014. The Press Note has also
widened the definition of the terms ‘infrastructure’ and ‘common facilities’ in
the FDI Policy to include railway line or sidings including electrified tracks
and connectivity to main railway line.
the aforementioned activities of the railway transport sector and the
amendments are made in the “Consolidated FDI Policy Circular of 2014” (“the FDI Policy”) vide Press Note no. 8
(2014 Series) dated 27th August, 2014. The Press Note has also
widened the definition of the terms ‘infrastructure’ and ‘common facilities’ in
the FDI Policy to include railway line or sidings including electrified tracks
and connectivity to main railway line.
However,
FDI in the said activities is subject to sectoral guidelines imposed by the
Ministry of Railways. Moreover, in case of proposals involving foreign direct
investment of more than 49% in sensitive areas from a security point of view will
be taken up by the Cabinet Committee on Security (CCS) for consideration on
case to case basis.
