FDI In Railway Sectors

The Indian railways are the backbone of the transportation industry, witnessing a staggering amount of passengers daily. India has the fourth largest railway system in the world. Foreign Direct Investment will help squeeze out the growth potential of the Indian railway sector.

A 100 percent FDI in railway industry in India is allowed for the railway infrastructure under the automatic route. Foreign investment will lead to an improved infrastructure leading to increased productivity and customer satisfaction. This inflow of foreign investors will bring a gush of technology into India.

FDI in railway industry in India can drastically change the face of Indian Railways with an inflow of technology and capital. There is immense room for development in the country’s railway system and a foreign investment can efficiently bridge the gap between the current scenario and technological advancement.


Industry Scenario

Indian Railways aspires to add 1.5% to India's GDP by building infrastructure to support 40% modal freight share of India’s economy.

Two Dedicated Freight Corridors (DFC), one on the Western route (Jawaharlal Nehru Port to Dadri) and another on the Eastern route (Ludhiana to Dankuni), have been fast-tracked. INR 25,320 crore worth of contracts have been awarded in the last two years for the implementation of DFCs.

The Indian Railways is looking to award 6 tenders worth Rs 8,000 crores (US$ 1.2 billion), for setting up a country-wide electricity transmission network, as part of a strategy to reduce electricity bills.


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    4th largest railway system in the world
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    1.4 mn-Single largest employer in India and 8th largest in the world
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    4th largest rail freight carrier in the world



1. January 2017 - Indian Railways is planning to award 6 tenders worth USD 1.2 bn for setting up a countrywide electricity transmission network as part of a strategy to reduce electricity bills.

2. October 2017 - Alstom's rail locomotive plant in Madhepura, Bihar, starts production of first electric railway engine, GE imports prototype of diesel locomotive to be manufactured at Marhaura.

3. June 2017 - CIDB Holding (Malaysia) to invest USD 774.5 mn in redevelopment of Udaipur, Howrah, Indore, Secunderabad, Pune and Faridabad railway stations.

4.  January 2017Indian Railways has circulated a draft cabinet note for setting up a dedicated USD 5 bn Railways of India Development Fund (RIDF).

5. May 2016 - Bombardier, the largest supplier to Delhi Metro has invested over USD 100 mn in India in the past two decades. It is eyeing up to USD 1 bn business from India in the next 5 yrs.

FDI Facts

897 mn  FDI inflows (in USD) in railway components during April 2000 - December 2017.

291 mn  FDI equity inflow (in USD) during April 2014 - March 2017

100 % FDI allowed under automatic route for Construction, operation and maintenance of suburban corridor projects through PPP, High speed train projects, Dedicated freight corridors, Railway electrification, Signaling systems, Freight terminals, Passenger terminals, Mass Rapid Transport Systems & Infrastructure in industrial parks