Vande Bharat trains to get a PLI boost as Indian Railways looks to reduce import dependence, make more parts in India

Vande Bharat trains will increasingly have indigenous components, with the Modi government looking at a new PLI or Production Linked Incentive Scheme for train parts. In a bid to attract foreign manufacturing firms and lessen import reliance, the government is set to roll out a PLI scheme for train component manufacturers, an ET report said.

The demand for Vande Bharat and LHB components is poised to witness a substantial surge in the country. By 2047, an estimated 4,500 VB trains will be operational nationwide, an official was quoted as saying.
Sources familiar with the matter told ET that the scheme’s specifics will be developed in collaboration with a consultancy firm. The selection of this firm will be made through a bidding process slated for this month.

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The chosen consultant’s task will involve identifying key components largely imported for making engines and coaches, commonly referred to as rolling stock. The PLI initiative, a cornerstone of the government’s ‘Atmanirbhar Bharat’ strategy, focuses on providing output-driven incentives for typically imported products.
Aligned with Indian Railways’ broader objective of streamlining passenger coach offerings in railways, the PLI scheme aims to narrow the spectrum to just two types: Linke Hofmann Busch (LHB) and Vande Bharat. Currently, the array encompasses 28 variants.
As of now, the LHB coaches, introduced in 1999, entail a mere 1.5% import content. Conversely, the Vande Bharat trains have an estimated 15% import component.

One official highlighted that the primary thrust will involve gauging the export potential of Vande Bharat trains and devising strategies for localizing the components used in the train. Additionally, boosting domestic production of components will drive down the maintenance expenses associated with 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.

Despite sustained demand from the railway sector, India continues to import crucial rolling stock elements, including wheels and axles. In a recent instance, China’s TZ (Taizhong) Hong Kong International Ltd. secured a contract for 33,000 LHB wheels, among other parts. Similarly, Aurangabad-based Bonatrans India acquired an order, which involved importing black forged axles from Railteco, China, and performing subsequent machining in India.
In a bid to alleviate some of this import dependency, the railways recently sanctioned a procurement order for 1.54 million forged wheels manufactured within the country.