The government may next month open some segments of the railways to 100 per cent foreign direct investment (FDI), official sources revealed.

According to the sources, the Commerce Ministry's Department of Industrial Policy & Promotion has circulated a final note for the Cabinet's consideration for allowing up to 100 per cent FDI in the construction and maintenance segments of the railway network.

More precisely, the note also proposes FDI in suburban corridors, high-speed tacks and freight lines connecting ports, mines and power installations. FDI will, however, not be allowed in existing passenger and freight network operations.

Sources also revealed that the Home Ministry has cautioned the government against permitting Chinese investments in Railway projects in border areas could pose a security risk to India.

A senior official said that the ministry has "strong objections over allowing the participation of Chinese companies in the Indian railway network."

Earlier, the Home Ministry had cautioned the government against Chinese investments in the country's telecom and ports sectors.

The ministry has proposed the setting up of a core group of technical and security experts to evaluate FDI proposals on a case-to-case basis to make sure that such foreign investments do not jeopardize the country's security.