Railways plans PLI scheme for train parts
production-linked incentive (PLI) scheme for train component makers as part of its efforts to attract foreign manufacturing firms and reduce dependence on imports, people aware of the matter said. 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, officials told ET. The consultant will prepare a list of components that are largely imported and used in making engines and coaches, also called rolling stock.
Under the PLI programme, the government offers output-linked incentives for products that are usually imported. 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.
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