The Telegraph
Friday , July 25 , 2014
CIMA Gallary

Defence, railway FDI in final lap

Kant: Review time

New Delhi, July 24: Consultations among ministries on easing foreign direct investment norms in defence and railways are in the final stages and a cabinet note will be moved soon.

“The cabinet notes for railways and defence are under the final consultative process. Once we get the final comments, we will put them up to the Cabinet for approval shortly,” Amitabh Kant, secretary in the department of industrial policy and promotion (DIPP), said on the sidelines of the CII Invest North Summit here today.

The government proposes to hike the foreign direct investment (FDI) ceiling in the sensitive defence sector to 49 per cent from 26 per cent, ensuring control in Indian hands, to boost the domestic industry.

Besides, it plans to ease FDI norms for the cash-starved railways. The DIPP has proposed permitting 100 per cent FDI in areas such as high-speed train systems, suburban corridors and dedicated freight line projects implemented under the public-private partnership mode. However, FDI is not proposed to be allowed in train operations and safety.

According to estimates, the railways are facing a cash crunch of around Rs 26,000 crore.

On FDI in construction, Kant “that is also at a fairly advanced stage now. The final process of interaction is on”.

FIPB nod

The Foreign Investment Promotion Board (FIPB) has cleared 19 FDI proposals, including that of Walt Disney Company and Reckitt Benckiser (India), involving total investments of Rs 2,326.72 crore.

However, it rejected the proposal of Multi-Commodity Exchange of India for a post-facto (after the fact) approval of the foreign investment made by Alexandra Mauritius before the period when FDI in commodity exchanges was brought under the approval route. It rejected the application of George Institute for Global Health (Hyderabad), BIESSE Manufacturing Company (Bangalore) and three others.