New rail tech policy in works; India eyes major boost for domestic manufacturing

India plans to unveil a new “rail tech” policy in the coming weeks to boost domestic manufacturing of next-generation railway technology and equipment. Under the proposed framework, the Railway Board is expected to offer partial funding, technical support, and access to testing facilities to manufacturers.

The policy is part of the government’s rail modernisation drive and aims to reduce dependence on imported railway technology, including from China.

"A new Rail Tech policy will give much needed impetus to innovation for mass transport," a senior official told ET, noting that is would encourage collaboration between domestic firms and research institutions.

India’s imports of railway and tramway locomotives, rolling stock, and equipment stood at about Rs 6,098 crore in FY25, with locomotive components forming the bulk of the import basket, reflecting reliance on imported sub-systems.

Trade data and project reports for 2024–25 estimate that around 55% of railway component imports are for Indian Railways, with 45% for metro and rapid rail systems. Imports account for a limited share of India’s overall railway component requirements.

The FY27 Union Budget allocated Rs 52,108.73 crore for rolling stock capital expenditure, up from Rs 50,007.77 crore this fiscal year, primarily for new locomotives, coaches, including Vande Bharat train sets, and wagons as part of fleet modernisation.

The government’s proposed rail technology policy builds on the Indian Railway Innovation Policy launched in June 2022, which offered grant support of up to Rs 1.5 crore on a 50:50 cost-sharing basis for startups and smaller companies to develop functional prototypes.

The earlier policy focused on improving safety, efficiency, and maintenance, and provided innovators with ownership of their solutions, access to a secure testing environment, and assured procurement for successful low-cost technologies.

India plans to be entirely self-sufficient in building seven new bullet train networks, the railway minister said. Currently, China dominates India’s railway equipment imports, followed by Germany and Austria for engineering systems, and the US and Japan for specialised propulsion and signalling components.