India OKs foreign investment hike in railways and defense
The government is attempting to push ahead with much-needed reforms after sweeping to power at elections in May with the biggest mandate in 30 years.
But its efforts hit a major hurdle this week, when the opposition blocked its attempts to introduce legislation to lift investment in the insurance sector.
Cabinet approval comes on the eve of US Secretary of Defense Chuck Hagel’s visit to India to strengthen ties between the two militaries and to drum up defense deals. Hagel, who arrives late Thursday, is expected to meet with top government ministers during the three-day visit. “The US recognizes the immense potential for its companies in the Indian arms market” with the lifting of the investment cap, analyst Sameer Patil from Mumbai-based think tank Gateway House said this week.
Modi’s government wants to speed up modernization of its Soviet-era military after years of slow procurement and the collapse of deals over corruption allegations.
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