Indian Railways record FDI inflow of US$390m

The foreign funding, received over 2014-2017, was utilised for manufacturing of coaches, wagons and parts, signalling equipment and diesel and electric locomotives and parts of locomotive

April 10, 2018

Steady investment into infrastructure has helped Indian Railways report record-high passenger earnings of US$7.4 billion in financial year 2017-18 after rising 4.3 per cent from previous year

A stable revenue generator for the railways is freight movement, which increased by 4.8 per cent to 1.2 billion tonnes during 2017-18. Leading to 8 per cent rise in earnings to to US$1.3 billion

In the current financial year, the railways is set to invest around US$4.8 billion in rolling stock, including diesel and electric locomotives, wagons and passenger coaches to boost operations

Owing to growth opportunities, Several foreign governments and railways operators have shown keen interest in high-speed railways infrastructure as well as station redevelopment program

Indian Railways received foreign direct investment (FDI) equity inflow of US$390 million over April 2014 to December 2017. The world’s third-largest railway system said on April 10th that the foreign funding was utilised for manufacturing of rolling stock (coaches and wagons including its parts), signalling equipment and locomotives (diesel and electric) as well as parts of locomotives. The projects come as the crucial transport system is going through broad changes to increase capacity and improve service. The steady investment into railway infrastructure has borne encouraging results with Indian Railways reporting record-high passenger earnings of US$7.4 billion during financial year 2017-18 after rising 4.3 per cent from the previous year. This was backed by a 6.5 per cent rise in ticket bookings to 556 million.

A stable revenue generator for the railway system is freight movement, which increased by 4.8 per cent to 1.2 billion tonnes during 2017-18. The originating freight earnings in the fiscal year saw an increase of 8 per cent to US$1.3 billion. The average number of container rakes loaded per day has increased from 103.4 in 2016-17 to 116 in 2017-18. Indian Railways is planning to treble its freight traffic to 3 billion tonnes by 2030 on the back of the Eastern and Western Dedicated Freight Corridors, which will be commissioned by April 2020. The carrier is trying to increase railways’ share in the goods movement to 50 per cent from the current 35 per cent. In the current financial year, the railways is set to invest around US$4.8 billion in rolling stock, including diesel and electric locomotives, wagons and passenger coaches.

The national transporter is expected to soon come up with a bulk tender for 38,000 wagons in a month. Meanwhile, the Ministry of Railways has signed preliminary agreements with China, France, Spain, South Korea, Japan, the UK, Russia and Germany for cooperation in high speed railways. An agreement has been signed with Government of Japan for Mumbai-Ahmedabad High Speed Rail (MAHSR) project which includes provisions under transfer of technology and “Make in India”. Several foreign governments and railways have also shown keen interest in the station redevelopment program. These include French Railway (SNCF), Korean Railway, Governments of Germany, China and the UK. Indian Railways moves over 3 million tonnes of freight  and 22.4 million passengers every day on its over 66,000 km network.