Infrastructure is the backbone of any nation’s development and, therefore, the sector enjoys the government’s attention. In the interim budget for 2019-2020, around ₹4.56 trillion (US$63.20 billion) was allocated to the infrastructure sector, which comprises transportation (rail, aviation), power (renewable and non-renewable) and construction. A large part of the budget, coupled with government initiatives and policies, has made the infrastructure sector lucrative for both domestic and foreign players.
Transportation
The government has focused on attracting investment in railway infrastructure by making investor-friendly policies. Currently, 100% foreign direct investment (FDI) under the automatic route is permitted in railway infrastructure, which includes manufacture and maintenance of rolling stock (coaches and locomotives) and mass rapid transport systems (metros).
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J. Sagar Associates
FDI inflows into railways-related components from April 2000 to March 2019 stood at around US$969 million. In December 2018, French manufacturer Alstom announced plans to expand capacity at its coach production facility in Sri City, Andhra Pradesh. The government has signed an agreement with Japan to implement the Mumbai-Ahmedabad high-speed rail corridor along with financial assistance that would cover 81% of the total project cost. The construction of the Virgin Hyperloop One is in full swing between Mumbai-Pune and the government of Andhra Pradesh has signed a memorandum of understanding with Hyperloop Transportation Technologies for the Amravati-Vijayawada route.
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(The article was updated on 27 June 2019. The data are subject to change with the budget.)
Upendra Nath Sharma is a partner and Pooja Thomas is a senior associate with J. Sagar Associates. Their views are personal.
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Upendra Nath Sharma | Tel: +91 124 439 0643
Email: upendra@jsalaw.com
Pooja Thomas | Tel: +91 124 439 0757
Email:pooja.thomas@jsalaw.com
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