Insight - The railways in India: a big network with big opportunities for Australia

Everything about railways in India is big. The country has one of the world’s largest rail networks under single management, 119,600km of track, and a transportation system that carries over 22 million passengers a day and 8.4 billion passengers a year.

Around 1.101 billion tons of freight are also transported by rail around India annually – and more than half of that freight is coal.

Indian Railways, owned and operated by the Government of India through the Ministry of Railways, is the world’s eighth largest employer, with a staff of over 1.3 million. An integrated rail business, Indian Railways also provides infrastructure development, transportation services and the regulation of private operators.

Modernisation across the sector

The railways are India’s oldest infrastructure, dating back to the time of British rule, and modernisation is ongoing and a priority area for the government.

Indian Railways’ Vision 2022 statement highlights key areas for development including new freight corridors on the 9,500km of the Golden Quadrilateral routes; development of high-speed corridors on the Diamond Quadrilateral Project; the raising of speed on nine routes including Delhi-Agra, Mumbai-Goa, and Chennai-Hyderabad; and the modernisation of a number of stations.

The sourcing of Foreign Direct Investment (FDI) and rolling stock manufacturing are also areas of focus.

Indian Railways is working with international companies in a number of important areas to modernise the system. These include heavy haul infrastructure and operations; advanced signaling technologies; speed raising to 200-250 kmph; station development such as multi-level arrival and departure facilities, commercial/retail space and intermodal integration; and the upgrading and building of freight terminals and logistics facilities.

Australia’s excellence in heavy haul and freight

Australia’s capability in heavy haul and freight is recognized globally - we operate some of the heaviest and longest heavy haul trains in the world with axle loads of 40 tonnes and train lengths of 2.5 km – and more.

Australia is also implementing world leading innovations, including remotely located train control centres, driverless trains operating 24/7, and automated maintenance facilities.

Australia’s research and development capabilities are also globally renowned, with rail bodies and research centres actively involved in projects worldwide which cover all aspects of rail transport – from manufacturing parts and products to environments, performance, safety, human factors and optimisation.

Specialised centres for railway engineering

A number of Australian universities are home to highly regarded specialist centres for railway engineering. In recent years, these specialist centres have been contributing to India’s rail modernisation program.

Melbourne’s Institute for Railway Technology (IRT) at Monash University, which has established a track record in solving railway-related technical issues, was recently engaged by India’s state-owned DFCCIL – the Dedicated Freight Corridor Corporation of India Limited – to advise on setting-up a new research and development entity to support the development of rail in India.

Called SRESTHA – the Special Railway Establishment for Strategic Technology & Holistic Advancement – the new entity will engage industry experts and leading scientists from around the world.

Ravi Ravitharan, the Director of Monash’s Institute for Railway Technology, says this collaborative venture will help to modernise India’s rail through research and development that is responsive to local needs and that it has the potential to evolve into a significant facility to give advice on rail research globally.

Another Australian group, The Centre for Railway Engineering at Central Queensland University (CQU), has just finished a second project in India.

The Rockhampton-based Centre, whose members include academics, researchers, technicians, and software developers, provides expertise in areas which include railway engineering and maintenance, instrumentation, and intelligent devices.

Professor Colin Cole, who heads the Centre, says he sees continuing commercial opportunities for Australian organisations in India’s rail sector. ‘There’s a strong commitment to upgrade both freight and passenger systems,’ he says, pointing to safety and heavy haul rail as particular areas of opportunity.

Opportunities for Australian organisations

Ravi Ravitharan of Monash University agrees that the opportunities available in India now are significant.

‘India’s population is growing, its needs are changing, and the government has responded. There are opportunities for Australian industry to be a part of India’s development, but organisations need to be committed for the longer term and be prepared to collaborate in a way that responds appropriately, taking into consideration the local environment,’ he says.

‘You need to be active on the ground in India and work closely with your partners to develop knowledge and understanding on both sides.’

Mr Ravitharan cautions that everyday priorities in India can be different from those in Australia. ‘For example, there is often a need for multiple delegates to sign off on a decision.’

To win a project in India ‘you need to have a local partner and willingness to understand the local business and local culture’. And, as with any new market entry, patience is also required. ‘You need to create a sense of true partnership, which takes time to establish, and you have to create a reputation for your business before expecting people to commit and respect you.’

He adds that there are there are often many stakeholders to engage and different influences that can change the course of a project, which is why partnerships are important in developing understanding and respect on both sides.

Strategies for entering the Indian rail sector

Professor Cole of CQU also advises small- and medium-sized companies to consider partnerships when thinking about the entering the Indian market.

Tenders are often for large values, and the tenderer should have the ability to offer reasonably sized security deposits. Also, for a tender to be successful it is usually necessary to put forward a number of experts as part of the team. That means experts who are defined by their experience and CVs.

‘So winning a tender can often be a collaborative venture in assembling the required number of suitably qualified experts before you can begin on any of the other preparations.’

He adds that it is important to read contractual conditions carefully and to understand the processes of tendering. ‘The specifications tend to be brief in the technical sense, and should be interpreted with a fairly wide meaning,’ he says, ‘and you need to understand all aspects that are inferred, so that the scope of the quote is complete.’

Australian organisations looking to enter the Indian rail sector are advised to visit the country regularly to make sure that they understand the market, to get to know the relevant organisations and key decision-makers, and to participate in targeted events.

Ravi Ravitharan from Monash’s Institute for Railway Technology says that he has found Austrade to be a very important connection in helping the Institute for Railway Technology to do business in India. ‘They have opened doors,’ he says.

Read more about business opportunities in India or contact info@austrade.gov.au