FCC

Railways mulls PLI program for train components

2023-08-21

The government has intentions to introduce a production-linked incentive (PLI) scheme for manufacturers of train components. This move is a part of their strategy to entice foreign manufacturing companies and decrease reliance on imports.

It has been conveyed by officials that the specifics of the PLI scheme will be developed with the aid of a consultancy firm. This firm will be chosen through a bidding process within this month.

The chosen consultant will create a compilation of components that are majorly brought in from foreign sources and are utilised in the construction of engines and coaches, commonly referred to as rolling stock.

The government's PLI initiative functions by providing incentives linked to the output for products that are typically brought in from other countries.

The proposed PLI scheme for the railway sector is consistent with the government's objective of streamlining the types of passenger coaches in Indian Railways. They plan to have just two types: Linke Hofmann Busch (LHB) and Vande Bharat. This is a reduction from the current 28 varieties.

The percentage of imported components in LHB coaches, which were introduced in 1999, is roughly 1.5%. In contrast, it is projected to be about 15% in the Vande Bharat trains.

As one of the aforementioned officials explained, the primary focus will be on evaluating the potential for exporting Vande Bharat trains and identifying the necessary steps to localise the components used in these trains.

The domestic production of components will also aid in decreasing the maintenance expenses associated with these coaches.

The official further stated that this PLI program will serve as an incentive to establish new manufacturing facilities or expand existing ones. This expansion would be directed towards the production of coach and engine parts that are presently sourced through imports.

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