Region/Countries: Asia, India Industry: Other Date: October 2018

Why this is important to Wisconsin businesses: Indian Railways is the fourth-largest railway system and the seventh-largest employer in the world, and will see a projected $131 billion in investment in the next five years.

Indian Railways (IR) started its 53 km journey between Mumbai and Thane 165 years ago. Since then, it has come a long way, and is now the fourth-largest railway network in the world. In the next five years, it is expected to continue to grow, and is likely to become the third-largest network in the world. Operated by the Ministry of Railways, it has become a lifeline for India’s economy, and the government is now focusing on high-speed trains, bringing in new technologies and introducing dedicated freight corridors.

Indian Railways comprises 121,407 km (75,483 miles) of track over 67,368 km of route, and about 7,000 stations. The system has 13,000 passenger trains running every day on long-distance and suburban routes, and runs more than 9,200 freight trains daily. In 2017-18, Indian Railways carried 8.3 billion passengers and transported 1.2 billion metric tons of freight. Indian Railways employs about 1.5 million people, making it the seventh-largest employer in the world.

Indian Railways earned revenues of $27.5 billion during FY 2017-18, registering growth of 9.6 percent over the previous fiscal year. The revenue from freight was $18 billion, and from passengers business $7.5 billion.

Foreign direct investment (FDI) equity inflow from April 2014 to December 2017 in the railway sector was $389.8 million. Indian Railways is expected to see investment of $131 billion in the next five years.

The Ministry of Railways has signed memorandum of understanding with China, France, Spain, South Korea, Japan, the United Kingdom, Russia and Germany for cooperation in high-speed railways. A memorandum of cooperation has been signed with the government of Japan for the Mumbai-Ahmedabad High Speed Rail (MAHSR) project, which also includes technology transfer and Make in India. Many foreign governments and railways—including French Railway, Korean Railway, the governments of the Federal Republic of Germany, China and the United Kingdom—have shown keen interest in the Indian Railways Station Redevelopment project.

The Indian government’s Department of Industrial Policy and Promotion has issued a consolidated FDI policy that allows FDI in the railway infrastructure sector under the automatic route in areas such as suburban corridor projects through public-proviate partnerships, high-speed train projects,  dedicated freight lines, rolling stock including train sets, locomotive/coach manufacturing and maintenance facilities, railway electrification, signaling systems, passenger terminals, infrastructure in industrial parts pertaining to railway line/sidings, electrified railway lines, connectivity to main railway line, and mass rapid transport systems.

Agreements have also been signed with ALSTOM (France) and General Electric (U.S.) for manufacturing and maintenance of electric and diesel locomotives. Under the contract, 800 electric locomotives and 1,000 diesel locomotives are to be manufactured at Marhowrah and Madhepura factories in India. In October 2018, Swiss power company ABB won an order worth $16 million from Indian Railways to supply traction transformers.

Indian Railways is in the process of expansion and upgrades, creating immense investment opportunities across the entire sector, including capacity, de-bottlenecking, redevelopment and improving passenger amenities, making it an attractive investment and export opportunity for Wisconsin companies.