RAILWAY

FDI In Railway Sectors

The Indian Railways is among the world’s 4^th largest rail networks, behind only US, Russia and China. The Indian Railways route length network is spread over 115,000 km, with 12,617 passenger trains and 7,421 freight trains each day from 7,349 stations plying 23 million travellers and 3 million tonnes (MT) of freight daily. India's railway network is recognised as one of the largest railway systems in the world under single management.

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.

100% FDI in railway industry in India is allowed under the automatic route.

6.1 %

Passenger traffic growth(2011-17)
25.2 %

Freight traffic growth(2011-18)
23 mn

Average daily passengers
$ 14.3 bn

Revenue from freight traffic(2016-17)

1

4th largest railway system in the world
2

4th largest rail freight carrier in the world
3

Single largest employer in India and 8th largest in the world

The Indian Railways' passenger earnings in 2017-18 have been the highest ever and clocked a 4.2% increase to $7.2 bn from $6.9 bn during the previous financial year
Indian Railways’ revenues increased at a CAGR of 6.20 per cent during FY08-FY19 to US$ 27.13 billion in FY19.
Earnings from the passenger business grew at a CAGR of 6.43 per cent during FY07-FY19 to reach US$ 7.55 billion in 2018-19P. Freight revenue rose at a CAGR of 4.30 per cent during FY08-FY19 to reach US$ 18.20 billion in 2018-19.
The gross revenue stood at Rs 85,835.05 crore (US$ 12.28 billion) as of September 2019, FY20.
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
The Government of India has signed an agreement with the Government of Japan under which Japan will help India in the implementation of the Mumbai-Ahmedabad high speed rail corridor along with a financial assistance that would cover 81 per cent of the total project cost

Rising passenger & freight traffic
Increasing urbanization, rising incomes (both rural and urban), growing industrialization across the country along with private sector participation
Increasing freight traffic
Growing industrialization across the country
Dedicated freight corridor
Six high-capacity, high-speed dedicated freight corridors
Mass Rapid Transit Systems (MRTS)
MRTS is planned between Gurgaon and Bawal to provide direct connectivity to Manesar Bawal Investment Region (MBIR)
Diamond Quadrilateral network of high-speed rail
Connecting major metros and growth centers of the country

November 2019: the pilot project was launched to study the feasibility of using Railways’ parcel service for e-tail players.
November 2019: Indian Railways entered into the Procurement cum Maintenance Agreement with Madhepura Electric Locomotive Pvt. Ltd. (MELPL), a joint venture of Indian Railways and France-based Alstom to manufacture 800 electric locomotives for freight service and its associated maintenance.
Dec 2018: France-based Alstom announced plans to augment its coach production capacity at its facility in Sri City from 20 cars per month to 24 cars per month. Also, it will set up a new production line to increase capacity to 44 cars per month by the end of 2019.
Dec 2018: Prime Minister of India laid the foundation stone for the third phase of the Pune metro.
Oct 2017: Alstom's rail locomotive plant in Madhepura, Bihar, starts production of the first electric railway engine. General Electric imports prototype of diesel locomotive to be manufactured at Mathura.
Jun 2017: CIDB Holding (Malaysia) to invest $774.5 mn in the redevelopment of Udaipur, Howrah, Indore, Secunderabad, Pune and Faridabad railway stations.
Jan 2017: Indian Railways is planning to award 6 tenders worth $1.2 bn for setting up a countrywide electricity transmission network as part of a strategy to reduce electricity bills.

$977.2 mn FDI inflows (in USD) in railway components during April 2000 – June 2019
100 % Foreign Direct Investment In The Railway Sector is allowed under automatic route for operation and maintenance of suburban corridor projects through PPP including a 100% FDI in Railways infrastructure