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.

Major projects include:

  • Redevelopment and modernisation of stations
  • Dedicated Freight Corridor (DFC) development are some of the biggest infrastructure projects being undertaken in India and are funded by two international agencies, the World Bank and Japan International Cooperation Agency (JICA)
  • Port Rail linkage project
  • Development of metro rail in Delhi, Mumbai, Bangalore, Hyderabad, Jaipur and Kolkata
  • National High Speed Rail project
  • Rail Technology Modernisation
  • Manufacturing of modern rolling stock.

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 projects and training and skills development to support the new expansion of the railway network across the country.

These include:

  • Niche areas where Australian expertise is highly regarded, such as heavy haul, rail safety, training and signalling.
  • Consultancy and project management services for 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 clean tech related consultancy services.
  • Rolling stock engineering expertise and components to Original Equipment Manufacturers (OEMs).
  • Delivery of onshore and offshore training programs in the 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.

Rapid Transit projects in India are based around metro, monorail and light rail systems and are currently proposed, under construction or operational in a number of cities across India. 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 system.

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 and transport models for Indian cities. India’s Planning Commission, has estimated that investment required for metro projects will be in the order of A$27 billion by the end of the decade. Major metro projects are under construction include Lucknow, Kanpur, Hyderabad, Jaipur, Bangalore, Ahmedabad and Kochi. Projects in second tier cities such as Chandigarh, Pune and Indore are at the planning stage.

Competitive environment

International companies from the United States, Canada, Europe and China are actively involved in rail sector projects in India. International OEM’s such as GE, Bombardier, Mitsubishi, Hyundai-Rotem, Hitachi, Alstom and Siemens have relationships with Indian Railways through direct supply and joint venture partnerships. Alstom and Bombardier are manufacturing trains in India for Australian 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, Wabtec, AECOM, Knorr-bremse 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.

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

Local representation either as an agent, distributor, manufacturing partner or associate is a business necessity for this sector. It will result in 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 be protracted.

Due to the autonomous nature of DFC and metro project authorities, decision making is less bureaucratic.

However 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 2017, New Delhi

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

Links and industry contacts

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

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. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.

Contact details

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