Rail to India

Trends and opportunities

The market

Indian Railways (IR) is a state-owned enterprise operated by the Ministry of Railways and is the fourth largest rail network in the world. The Railway Board, under the Ministry of Railways, is the decision making body for all rail projects, governing 17 zones across India, as well as a number of subsidiaries.

In recent years IR has launched various schemes to attract private investment and participation, such as:

  • special freight train operator scheme
  • automobile freight train operator scheme
  • wagon investment scheme.

Major projects include:

  • development and modernisation of stations
  • dedicated freight corridors (DFC) is one the biggest projects and is funded by two multilateral agencies, the World Bank and Japan International Cooperation Agency (JICA)
  • development of metro rail in Delhi, Mumbai, Bangalore, Hyderabad, Jaipur and Kolkata
  • manufacture of rolling stock.

Rapid Transit projects in India are based around metro, monorail and light rail systems. The first rapid transit system in India was the Kolkata Metro, which commenced operation in 1984. The Delhi Metro was India's first modern metro, which started operation in 2002. Rapid Metro Rail Gurgaon which commenced operation in April 2013 is India's first privately owned and operated metro.

The government, as part of its urban transport policy, will support metro networks across cities that have a population of two million and above. Metro rail has become one of the defining features in urban planning of Indian cities. As per the twelfth five year plan (2012-17) of the Planning Commission, the government has estimated the investment required for metro projects to be around US$27 billion. Major metro projects are under construction in Hyderabad, Jaipur, Bangalore, Ahmedabad and Kochi. Projects in second tier cities like Chandigarh, Pune and Indore are at the planning stage (Source: Ministry of Urban Development, India, Metro Projects, 11 Aug 2014).

The Mumbai Monorail is India’s first monorail in India, which became operational in December 2013. The Kerala Monorail project is the second major monorail project launched in the country.

Opportunities

The key drivers for growth in India for Australian companies in the rail sector are network and capacity expansion for passenger and freight, modernisation and training and skills development to support the new expansion of the railways.

  • Niche areas where Australian expertise is highly regarded, like heavy haul, rail safety, training and signalling.
  • Consultancy and project management services for the civil and systems related contracts.
  • Power supply, signalling and communication, automatic train control systems, track laying and fare collection systems.
  • Supply of safety equipment and services.
  • Supply of energy efficiency products and technologies and cleantech related consultancy services.
  • Rolling stock engineering expertise and components to the Original Equipment Manufacturers (OEMs).
  • Delivery of onshore and offshore training programs in area of heavy haul operations, maintenance and adoption of new systems e.g. freight scheduling
  • Collaborative research in signalling, safety, freight movement, wayside track monitoring systems, etc.

Competitive environment

International companies from the United States, Canada, Europe and China are actively involved in rail sector projects in India. International OEM’s like Bombardier, Mitsubishi, Hyundai-Rotem, Hitachi, Alstom and Siemens have relationships with Indian Railways through direct supply and joint venture partnerships. Alstom has affiliations with Indian public sector undertakings like Bharat Heavy Electricals Limited (BHEL) and Bharat Earth Movers Limited (BEML) for manufacturing locomotives and high speed transport projects.

Bombardier Transportation is a major supplier of metro coaches for the Delhi Metro Project.

Other international companies involved in rail sector projects in India include Atkins Global, STS Rail, Interfleet Technology, AHL-TECH, SGS India, Parsons Brinckerhoff India Pty Ltd and Faively Rail Technologies India Ltd.

Tariffs, regulations and customs

The current legal framework under the Railways Act 1989 allows private railway systems in all forms. However, the government policy articulated under the Industrial Policy Resolution of 1991, reserves railway transportation for the public sector. Railway operation can only be handled by the public sector. All other activities such as design, construction, financing and maintenance can be undertaken through private participation.

The Railway Board constituted under the Railway Board Act, 1905 is a railway regulator. The tariff policy for Railways is fixed by the Railway Board.

Indian Railways is managed through 17 Railway Administrations which are legal entities. In addition there are six ports and other railway entities. These railway systems are members of the Indian Railway Conference Association, a body which deals with issues of inter railway movement of wagons and locomotives such as the levy of hire charges for use of rolling stock belonging to other railways.

Marketing your products and services

Market Entry

Most rail projects are tendered by the relevant project authority and Australian companies can participate in these tenders. These tenders are publicly released on the websites of the project authorities.

Some Australian companies have executed pilot projects to demonstrate technology across verticals, such as energy efficiency, fire safety and rail safety. This has led to adoption of the technology and follow on contracts. Sub-contracting opportunities are available with foreign, Indian private and government owned companies.

Local representation either as an agent, distributor, manufacturing partner or associate is a business requirement. This is a significant advantage for tenders, achieving cost competitiveness and meeting local requirements.

It is advisable to visit the market regularly to meet with Indian companies and key decision makers, attend and participate in targeted events. These are good opportunities to understand the Indian market, increase your company profile and build relationships.

Companies seeking to enter the market need to be willing to take a long term view of the market as decisions, especially in Indian Railways projects can take a long time. Due to the autonomous nature of DFC and metro project authorities, decision making is less bureaucratic. Companies need to be prepared to move quickly once decisions to proceed are taken, as time frames for responding are usually tight.

Austrade India has prepared a procurement guide for Indian Railways, DFC project and Metro Projects which can be shared on request and can facilitate partner identification and selection.

Trade events

International Rail Equipment Exhibition, 14 to 16 October 2015, New Delhi

Major international rail events from the Indian rail industry are listed on the Rail Serve website.

Links and industry contacts

Indian Railway Board
Dedicated Freight Corridor Corporation of India Limited (DFCCIL)
Delhi Metro Rail Corporation
IRCON International Ltd
Mumbai Railway Vikas Corporation (MRVC)
RITES (Government Enterprise - consultancy organization)
Rail Vikas Nigam Limited (RVNL)
Research Designs & Standards Organization (RDSO)
Railway Staff College, Vadodara
Indian Railway Institute of Transportation Management, Lucknow
Indian Railway Catering & Tourism Corporation Ltd
Indian Railway Finance Corporation Ltd (IRFC)
Railtel Corporation of India Limited (Rail Tel)
Konkan Railway Corporation Limited (KRCL)
Bharat Wagon and Engineering Co Ltd (BWEL)
Centre for Railway Information Systems (CRIS)
Container Corporation of India Limited (CONCOR)

Please note: this list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only.

Contact details

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Austrade provides information and advice that can help you reduce the time, cost and risk of exporting. We also administer the Export Market Development Grant Scheme and offer a range of services to Australian exporters in growth and emerging markets.