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RBI notified revised FDI policy in Defence and Railways

Dec 9, 2014 19:13 IST

The Reserve Bank of India on 8 December 2014 notified revised Foreign Direct Investment (FDI) policy in Railways Infrastructure and Defence sectors.

As per the revised norms notified by the Department of Industrial Policy and Promotion (DIPP) in August 2014, foreign investment ceiling in defence sector was increased to 49 percent and in rail infrastructure it was permitted 100 percent.

Revised guidelines in Railway
• Government permitted 100 percent FDI in railway infrastructure sector under the automatic route subject to conditions.
• 100 percent cap is allowed in railways sectors such as construction, operation & maintenance of suburban corridor projects through PPP, high speed train projects and dedicated freight lines and Mass Rapid Transport Systems.
• FDI also allowed in rolling stock including train sets, and locomotives or coaches manufacturing and maintenance facilities, railway electrification, signaling systems, freight terminals and passenger terminals, among others.
• FDI beyond 49 of the equity of the investee company in sensitive areas from security point of view will be under the Cabinet Committee on Security (CCS) for consideration on a case to case basis.

Revised guidelines in Defence
• The foreign investment in defence sector (FDI, FIIs, RFPIs, NRIs, FVCIs and QFIs) up to 49 percent has been permitted under government route (FIPB). The earlier cap was 26 percent.
• Foreign Portfolio investment and FVCI investment will be under automatic route. The both will not exceed 24 of the total equity of the investee company.

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