Cabinet nod to hike FDI in defence, railways

Move expected to help resource-starved sectors

Cabinet nod to hike FDI in defence, railways

The Union Cabinet on Wednesday approved the budgetary proposal to increase the foreign direct investment (FDI) limit in defence sector to 49 per cent while fully opening the railway infrastructure segment for overseas players.

The 100 per cent FDI liberalisation in areas such as high-speed train systems and dedicated freight corridors is expected to help the resource-starved railways to implement the much-awaited project expansion plan. The two decisions were approved in the Cabinet meeting headed by Prime Minister Narendra Modi, sources said.

In the defence sector, the FDI limit was raised from the existing 26 per cent. The details of the decision on FDI in defence sector was not immediately available but according to the budgetary announcement, all the defence proposals would be subject to clearance by the foreign investment promotion board (FIPB). The control in joint ventures for manufacturing of defence equipment will also rest in Indian hands.

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