Green signal to FDI in railways, construction

Commerce ministry has cleared a cabinet note on foreign direct investment (FDI) in railways and construction, and the proposal is expected to get clearance before the code of conduct comes into force later this week.

As of now, FDI is allowed in mass rapid transport and component manufacturing, though not in railways.

Official sources said Commerce Minister Anand Sharma has given the final push and it will now be taken up by the Cabinet.

Reports said that the Department of Industrial Policy and Promotion has sent the note to the Cabinet, seeking 100 per cent FDI in railway infrastructure such as elevated rail corridor projects, freight terminals, suburban corridors, dedicated freight lines and high-speed train systems, but the final call on cap will be considered by the Cabinet Committee on Economic Affairs.

The FDI proposal in railways has been recommended through the automatic route and the proposal need not go through Foreign Investment Promotion Board.

Sources also said that the Commerce Minister is in talks with the finance ministry and the Reserve Bank of India for review of curbs imposed on gold imports.

India's gold imports have fallen to a trickle after the government hiked the customs duty to 10 per cent and imposed curbs on imports in a bid to reduce the current account deficit, which had risen to a record $87.8 bln or 4.8 per cent in the year ended March 2013.

The customs duty on gold was 4 per cent a year ago.

The government and RBI have also imposed physical restrictions by making imports linked to exports.