FDI In Defence, Railways To Be Increased

The government is likely to give nod to a higher limit of foreign direct investment (FDI) in railways and defence. However, the plan to allow FDI in e-commerce has been put on hold.

FDI up to 100% would be allowed under the automatic route in railway infrastructure projects, including projects like high-speed trains, sub-urban and dedicated freight corridors under public-private partnership (PPP) mode.

However, in strategic border areas, companies may need prior permission from the Foreign Investment and Promotion Board (FIPB).
“Due to security concerns in border areas, there is a view that clearance from the ministry of home affairs should be taken,” said an official.

In defence sector, the FDI limit of 26% would be raised to 49%.

The Cabinet Committee on Economic Affairs has already approved 49% FDI in the insurance sector.

But the government is unlikely to allow FDI in e-commerce as of now as it is of the view that it could impact domestic players.