Indigenisation Initiative

Push to increase domestic sourcing of rolling stock

Metro rail systems are emerging as a key solution for urban transportation in the country. At present, these systems are operational in nine cities – Delhi, Kolkata, Mumbai, Jaipur, Gurugram, Bengaluru, Kochi, Lucknow and Chennai – and new projects are being planned for Tier II cities as well. With a greater number of projects on the anvil, rolling stock requirements for metro systems are set to increase. Traditionally, a major proportion of rolling stock requirements of Indian urban rail systems have been manufactured by foreign companies such as Hyundai Rotem, Bombardier, Alstom, China South Locomotive & Rolling Stock Corporation Limited and Scomi due to an absence of technology and skilled manpower to manufacture rolling stock domestically.

In the past few years, a number of measures have been taken to develop rolling stock manufacturing capacity in India. Under the Make in India initiative, all rolling stock tenders have incorporated the criterion of procuring 75 per cent of metro rail cars and 25 per cent of their critical equipment manufactured domestically, either directly by foreign original equipment manufacturers (OEMs) or in partnership with reputed local companies. For instance, the contract conditions of the Delhi Metro Rail Corporation have mandated a cap of 25 per cent on sourcing of rolling stock manufactured abroad, while the balance is to be necessarily manufactured in India either through tie-ups or a wholly owned subsidiary.

Further, foreign players have also started establishing manufacturing facilities in India. Two players – Bombardier Transportation and Alstom Transport – have established coach manufacturing facilities in the states of Gujarat and Tamil Nadu respectively. Besides, initiatives are also being taken to reduce capital expenditure on rolling stock by using lighter materials for bogies, deploying permanent magnet motors to ensure energy conservation of up to 3-4 per cent and heating, ventilation and air conditioning (HVAC) systems that have the ability to adjust according to the passenger load on the train.

Huge opportunities for domestic and global players

Since domestically manufactured coaches are 25-30 per cent cheaper than imported coaches, there is huge scope for indigenisation of rolling stock. This is expected to create tremendous market opportunities for domestic as well as global players willing to invest in India. Upcoming metro projects provide opportunities to foreign players for setting up manufacturing units in India and also offer a large consumer base for OEMs and domestic companies. Further, the recent move to indigenise the production of 18 major components of coaches such as window glasses, battery boxes, brake blocks, bogie frames, vacuum circuit breakers, HVACs, and propulsion systems also offer significant scope to ancillary industries. Besides, the need for procurement of materials such as stainless steel to develop bogies will create a new demand segment for material suppliers.

The way forward

With a robust pipeline of projects, the market for rolling stock in India is set to expand in the years to come. Under-construction as well as announced metro rail, monorail and light rail projects will present significant rolling stock opportunities in the next two to three years.

The government is laying emphasis on deploying advanced technologies such as energy-efficient traction systems, driveless trains, new components and coach designs, and advanced passenger information systems to improve operational efficiency.

Further, attention is also being paid to standardisation of metro coach designs. Currently, every metro corporation has different requirements and specifications for the design and dimensions of rolling stock. Ensuring standardisation will not only ensure timely execution of projects, but will also reduce costs by at least 20 per cent. In addition, equal emphasis is being laid on the quality of the material delivered to ensure safety and comfort of passengers.

Going forward, these initiatives and the increased volume of domestic procurement is expected to result in economies of scale, thereby reducing manufacturing costs.


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