The Home Ministry is yet to send its response on the DIPP's Cabinet note that seeks to allow foreign direct investment in the railways sector covering areas such as high-speed trains and infrastructure.
"The Commerce and Industry Ministry has sent the Cabinet note on the matter long back and despite repeated reminders, the Home Ministry has not yet sent its views. Due to security reasons, their comments are important on the issue," an official source said.
The DIPP secretary is also expected to soon write a letter to his Railways counterpart on the matter, sources said, adding that the delay in obtaining comments could hold back further opening up of the important sector.
The Department of Industrial Policy and Promotion has proposed 100 per cent FDI through automatic route in the cash-starved railways sector.
However, FDI will not be allowed in areas related to train operations and safety.
At present, there is a complete ban on FDI in the railways sector except the mass rapid transport systems.
According to the proposal, foreign investment would also be allowed in "sub-urban corridor, high-speed train systems and dedicated freight line projects implemented in PPP mode".
DIPP has also suggested that companies should be allowed to pick up 100 per cent stake in the special purpose vehicle (SPV) that will construct and maintain rail lines connecting ports, mines and industrial hubs with the railways network.
The move will help development of infrastructure for industrial purposes.
Industrial development and exports have been suffering on account of poor infrastructure which hampers output and raises the cost of production.
It is felt railways can play a role in providing reliable transport facility necessary for promoting industrial growth.
