Is India's Ambitious Self-Reliant Train Component Manufacturing On Track?

The government is taking proactive measures to enhance the indigenous production of train components that aligns with the 'Atmanirbhar Bharat' (Self-Reliant India) campaign. One of the key steps being considered is the introduction of a new Production Linked Incentive (PLI) scheme aimed at reducing the country's reliance on imported train parts. This initiative is designed not only to promote local manufacturing but also to attract foreign manufacturing firms to invest in India's burgeoning train component industry.

Consultancy Collaboration for Scheme Development

To ensure the effective implementation of the PLI scheme, the government plans to collaborate with a consultancy firm. This collaboration will involve the development of specific strategies and guidelines for the scheme's execution. The selection of the consultancy firm will be done through a competitive bidding process, scheduled to take place this month. The chosen consultancy will play a crucial role in identifying key components currently imported, particularly those that contribute to the manufacturing of engines and coaches, commonly known as rolling stock.

Streamlining Passenger Coach Offerings

As part of a broader objective, Indian Railways is working towards streamlining its passenger coach offerings. Currently, there are 28 variants of these coaches, but the focus is on narrowing down the options to just two types: Linke Hofmann Busch (LHB) and Vande Bharat. This strategic decision aims to simplify the manufacturing process, boost domestic production, and reduce maintenance expenses associated with the diverse range of coach variants.

Import Content and Export Potential

While the LHB coaches, introduced in 1999, have a relatively low import content of 1.5%, the Vande Bharat trains rely more heavily on imported components, accounting for an estimated 15% of their composition. The primary objective of the PLI scheme is to assess the export potential of Vande Bharat trains and formulate strategies to localize the production of components used in these trains. This move is expected to not only enhance self-reliance but also contribute to a reduction in maintenance costs.

Incentivizing Manufacturing Expansion

The PLI program's core focus is to incentivize establishing new manufacturing units and expanding existing ones. The aim is to enable these units to supply the necessary coach and engine parts currently imported. Despite a sustained demand for train components in the railway sector, India has been importing critical rolling stock elements, including wheels and axles. Recent developments, such as approving a procurement order for 1.54 million forged wheels manufactured within India, reflect a strong commitment to reducing import dependency.