Government looking at Production-linked Incentive for train-part Manufacturers

New Delhi(India), 16/08/23: The government is apparently considering a production-linked incentive (PLI) programme for train component producers in order to reduce import dependence and attract overseas manufacturers.

According to officials, a bidding process will be held at the end of August to select a consultancy firm to work on the PLI scheme.

According to the report, the consultant would compile a list of components used in the construction of engines and coaches, also known as rolling stock.

Through the PLI initiative, the government provides output-linked incentives for imported goods.

According to the source, the Indian Railways, one of the world’s largest transporters, has 28 types of passenger coaches, but the government aims to reduce them to two – Linke Hofmann Busch (LHB) and Vande Bharat.

LHB coaches, introduced in 1999, have an import component of 1.5 percent and Vande Bharat trains have an LHB of 15 percent.

An official stated, “The focus will be on assessing export potential of Vande Bharat trains and measures required to ensure localisation of components used in the train.”

Maintaining these coaches would be less expensive if the components were made locally.

The official stated, “This PLI programme will incentivise setting up of new manufacturing units, or expanding existing ones to supply coach and engine parts that are otherwise imported.”

Despite continued demand from the railways, India continues to import crucial rolling stock components such as wheels and axles.

In April, TZ (Taizhong) Hong Kong International Ltd was granted a contract for 33,000 LHB wheels. Bonatrans India also received an order, but it imported black forged axles from Railteco in China and machined them in India.

The railways recently awarded a procurement order for 1.54 million locally manufactured forged wheels in order to decrease some of this import dependence.