Cabinet approves India-Germany MoU in railways

The Union Cabinet chaired by Prime Minister Shri Narendra Modi has approved a memorandum of understanding (MoU) signed between the Indian Ministry of Railways and DB Engineering & Consulting GMBH of Germany

March 25, 2020

The deal will include opportunities in freight and passenger operations, infrastructure building and management, IT solutions, private train operations, etc

In No 2019, the Indian Rail Ministry had entered into an agreement with Germany’s Federal Ministry for Economic Affairs and Energy to build joint projects

Indian Railways, the third-largest in the world ferrying 23 million passengers daily, has received an FDI inflow of US$980 million over April 2000 to June 2019

Indian Railways, whose revenues have increased at a CAGR of 6.20 per cent over 2008-19, plans to introduce private rail operations in over 100 routes

India’s Union Cabinet led by Prime Minister Shri Narendra Modi on March 25 approved a memorandum of understanding (MoU) signed between the Indian Ministry of Railways and Germany’s DB Engineering & Consulting GMBH for technological cooperation in the rail sector. The agreement was first signed in February 2020. The agreement comes as the latest in a series of partnerships between the two nations in railways. In November 2019, the Indian Rail Ministry had entered into an agreement with Germany’s Federal Ministry for Economic Affairs and Energy to facilitate joint projects and growth of Indian railways.

The latest MoU for technological cooperation in the Railway Sector will enable cooperation in the following areas:

  1. Freight operations (including cross-border transport, automotive transport, and logistics)
  2. Passenger operations (including high-speed and cross-border traffic)
  3. Infrastructure building and management (including dedicated freight corridors and development of passenger stations)
  4. Development of a modern, competitive railway organization (including the improvement of organizational structures and railway reformation)
  5. IT solutions for railway operations, marketing, sales, and administrative purposes
  6. Predictive Maintenance
  7.  Private train operations
  8. Any other area which may be mutually agreed in writing between the two parties.

The Indian Ministry of Railways has entered into numerous partnerships for technical cooperation with various foreign Governments and National Railways, including those from China, France, Spain, South Korea, Japan, the UK, Russia, and Germany, among others. The focus of these projects has included high-speed rail, speed raising of existing routes, development of world-class stations, heavy haul operations and modernization of rail infrastructure, etc. Indian Railways, the third-largest in the world ferrying 23 million passengers daily, has received an FDI inflow of US$980 million over April 2000 to June 2019. 

To best develop the country’s biggest transport system, the Government has been inviting private capital and technology. Just last month, Indian Railways’ subsidiary, Indian Railway Catering and Tourism Corp (IRCTC), inaugurated its third private train – the Kashi Mahakal Express. The move came as part of a broader plan to introduce private rail operations in over 100 routes. This will offer lucrative investment opportunities including those related to the 150 modern train rakes that will be required for the service. Indian Railways’ revenues have increased at a CAGR of 6.20 per cent during the financial period 2008-19.