Railways May Get PLI Boost: Focus On Local Production For Vande Bharat And New-Age Train Components To Cut Imports

Expanding the incentives of the Production-Linked Incentive (PLI) scheme, the Centre is set to introduce a plan for the railway manufacturing sector, reports The Mint.

This initiative aims to push the 'Make in India' campaign by increasing domestic production of railway components — especially for the Vande Bharat and Linke Hofmann Busch (LHB) train sets, as well as parts for new-generation trains powered by alternative fuels like hydrogen.

The initiative is part of broader government initiatives to enhance domestic manufacturing and achieve self-reliance in critical industries.

The proposed scheme will offer output-linked incentives to companies manufacturing items such as wheels, brakes, transmission systems, and other typically imported parts.

These incentives are expected to range from 5 per cent to 10 per cent, with the final details to be determined upon the scheme's finalisation.

According to the report, the PLI scheme will span a three-year period, offering projected incentives of Rs 1,000-1,500 crore.

This will support reducing reliance on imports and potentially attract foreign manufacturers to establish or expand their operations in India's railway rolling stock sector, enhancing the local production ecosystem.

Although progress has been made in reducing import dependence in segments like signalling, over 50 per cent of components for new-age trains are still imported.

Rail systems and rolling stock companies such as Siemens, Alstom, and Stadler, already have set up their facilities in India through joint ventures, and the scheme's incentives will also encourage their vendors to establish manufacturing units in India.