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With the aim to cut down imports and attract foreign manufacturing firms, the Central Government is planning to introduce a production-linked incentive (PLI) scheme for train component makers.
The government is planning to introduce a production-linked incentive (PLI) scheme for train component makers as part of its efforts to attract foreign manufacturing firms and reduce dependence on imports.
The contours of the PLI scheme will be worked out with the help of a consultancy firm, which will be selected through a bidding process this month, the Economic Times reported officials as saying. The consultant will prepare a list of components that are largely imported and used in making engines and coaches, also called rolling stock.
For imported products, the government offers output-linked incentives through the PLI programme. The Indian Railways, one of the world’s biggest transporters, has 28 types of passenger coaches but the government plans to reduce them to two — Linke Hofmann Busch (LHB) and Vande Bharat.
The PLI scheme being considered for the railways is in line with the government’s plan of having only two types of passenger coaches in Indian Railways–Linke Hofmann Busch (LHB) and Vande Bharat–down from 28 at present.
The import component in LHB coaches, introduced in 1999, is around 1.5%, but in the Vande Bharat trains it is estimated to be about 15%.
“The focus will be on assessing export potential of Vande Bharat trains and measures required to ensure localisation of components used in the train,” one of the officials cited earlier said.
Local manufacturing of components will also help in lowering maintenance cost of these coaches.
“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,” the official said.
India continues to import critical components of rolling stock such as wheels and axles despite sustained demand from the railways.
The last contract was awarded in April this year to China’s TZ (Taizhong) Hong Kong International Ltd. for 33,000 LHB wheels, among other parts. Aurangabad-based Bonatrans India, too, had won an order but this was importing black forged axles from Railteco, China, and then machining in India.
To cut some of this import dependence, the railways recently awarded a procurement order for 1.54 million forged wheels that are manufactured in the country.
“The demand for Vande Bharat and LHB components is going to increase manifold in the country,” said another official quoted in the Economic Times report. “There will be 4,500 VB trains running in the country by 2047.”
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