Fdi In Indian Railways 54363

Strengths • • • •

Ready-made commuter base Trust of the commuter Customer loyalty Wide network of railway tracks in rural and urban areas • Monopoly

Weakness • Limited knowledge of local language • Less local • Reliance on existing resources, manpower and technology • Limited knowledge of problems in railways • Will take time for the foreign co. to get a hold over the organisation

Opportunities • Increase in revenue • Increase in employment as Indian labor is comparatively cheap • Increase in foreign suppliers of railway parts, boggies,etc • Advent of better technology • Use of railway land to built malls, food outlets ,etc • Better infrastructure by way of enhancement of railway lines

Threats • Extra charges on tickets may reduce no. of commuters • Resistance from local groups • Increase pressure from people from remote areas to bring railway lines there • Increased chances of losses if not managed properly • Government pressure to refrain from hiking fares on tickets , goods ,etc in case of inflation • Request for more compensation from people in case of accidents • Threat of strike from various unions

Introduction • Enjoys a near monopoly in India • Operated by companies for their purposes E.g. plantations, sugar mills, collieries, mines and ports

Arguments for: • Indian Railways – A golden goose • A rejuvenated and magnetic force destined to attract foreign capital • Disinvestment is an option • Better services • Increases in taxes to the government • Increase in foreign currency in India • Better security • Better frequency of trains

Arguments against: • Monopolization or partnership will lead to railways in the hands of private players • Employs more than 1.4 million people and transports more than 18 million engers daily • Caters to people from all strata of society • The private players might not expand railways in rural areas due to less profits • Hike in fares

Argument against: • Decrease in number of trains in areas where there Is less profit • They will encourage imports from their own(foreign) countries for manufacture of railway boggies ,parts,etc • They will give food and services contracts to foreign cos. • Decrease in employment due to supplement of manpower by technology • No social benefits to ex-servicemen, college and school students , handicapped , army personnel , etc

Conclusion • No cap on foreign direct investment in related domains. • Public Private Partnership model is uncertain in the case of railways • It carries a social responsibility

Current scenario • 100% FDI is allowed in Railway Related Components in India • The industry of railway related components in India supplies its products to the Indian railways and it also exports its products to foreign countries • The various kinds of products manufactured by the railway related components industry in India are locomotives lights, signals, slack adjusters, track fittings, round shaft chisels, and braking systems

Policy of FDI in railway related components • The government of India also gives various incentives to the foreign investors such as exemption from paying income tax in order to increase FDI Inflows to Railway Related Components industry of the country.

Presented by: • • • • •

Nikhil Fatnani Jaikishan Gupta Hardik Hariya Yogesh Raghani Amit Rajpal