Railway Sector Boom: India Sees $942 Million FDI, Rs 2.78 Lakh Crore Budget Push

The FDI inflows are underpinned by India's FDI Policy Circular dated October 15, 2020, which permits 100 per cent foreign direct investment under the automatic route in Railway Infrastructure.

The Government's Gross Budgetary Support (GBS) for capital investment in Railways was Rs 29,055 crore in 2013-14.

Source : ABPLIVE AI

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Key points generated by AI, verified by newsroom

• Railways attracted $942 million FDI equity, 100% automatic route.
• Government boosts railway capital investment significantly, reducing borrowing.
• MoUs signed with four nations for rail technology cooperation.

India's Railway sector has received a cumulative Foreign Direct Investment (FDI) equity inflow of USD 942 million between 2014-15 and December 2025. The figure was disclosed by Union Minister for Railways, Information & Broadcasting, and Electronics & Information Technology, Shri Ashwini Vaishnaw, in a written reply to a question in the Lok Sabha.

100 Per Cent FDI Permitted Under the Automatic Route

The FDI inflows are underpinned by India's FDI Policy Circular dated October 15, 2020, which permits 100 per cent foreign direct investment under the automatic route in Railway Infrastructure. No prior government approval is required under this framework. The permitted areas include suburban corridor projects through public-private partnerships (PPP), high-speed train projects, dedicated freight lines, rolling stock manufacturing and maintenance covering trainsets, locomotives, and coaches, railway electrification, signalling systems, freight and passenger terminals, Mass Rapid Transport Systems, and railway infrastructure within industrial parks.

Budgetary Support

The Government's Gross Budgetary Support (GBS) for capital investment in Railways was Rs 29,055 crore in 2013-14. For 2026-27, the allocation stands at Rs 2.78 lakh crore. The higher domestic capital allocation has been directed towards network expansion, rolling stock augmentation, safety infrastructure, passenger amenities, and technology upgradation. The increased domestic funding has also reduced the sector's Reliance on external borrowing.

MoUs With Switzerland, Germany, Russia, and Spain

The Ministry of Railways has signed Memorandums of Understanding (MoUs) with Switzerland, Germany, Russia, and Spain. These cover technical cooperation in freight and passenger operations, including multimodal transport, high-speed rail development, IT solutions for railway operations and administration, and predictive maintenance of assets.

Exports Cross Rs 26,000 Crore

Railway sector exports from India reached USD 3,355 million, approximately Rs 26,000 crore, between 2016-17 and January 2026. The exports are supported by Indian Railways' own Production Units and a private-sector supplier base. India manufactures a wide range of railway equipment domestically, including locomotives, passenger coaches, wagons, Metro cars, traction motors, gear boxes, motorised bogies, traction Transformers, propulsion systems, traction and auxiliary converters, cable harness assemblies, electronic cards, and magnetics. These are exported to the United States, the United Kingdom, Germany, France, Spain, Italy, Australia, Canada, Romania, Mexico, Mozambique, Bangladesh, and Sri Lanka. 

(Disclaimer: This article uses information originally published by Dalal Street Investment Journal (DSIJ). The views expressed are those of the original authors and not necessarily of ABP Network Pvt. Ltd. This content is provided for general informational and educational purposes only and should not be construed as investment, financial, legal or tax advice. Readers are advised to conduct their own research and/or consult a qualified financial advisor before making any investment decisions. This content is for informational purposes only and should not be treated as investment advice. ABP Network, its employees and associates shall not be responsible or liable for any losses or damages arising directly or indirectly from the use of or reliance on this article or any information contained herein.)

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