Manufacturing

India is preparing to roll out a new 'Rail Tech' policy in the coming weeks, a move aimed at strengthening domestic manufacturing of next-generation railway technology and equipment. The policy framework, being developed by the Railway Board, is expected to offer manufacturers a combination of partial funding, technical support, and access to dedicated testing facilities — giving domestic players the resources they need to compete with international suppliers. The initiative is a core component of India's broader rail modernisation agenda, and one of its key objectives is reducing the country's dependence on imported railway technology, particularly from China, which currently dominates India's railway equipment import basket. "A new Rail Tech policy will give much needed impetus to innovation for mass transport," a senior government official told the Economic Times, adding that the framework would actively encourage collaboration between domestic manufacturing firms and research institutions. The scale of India's current import reliance puts the urgency of this policy into sharp focus. India's imports of railway and tramway locomotives, rolling stock, and associated equipment stood at approximately Rs 6,098 crore in FY25. Locomotive components made up the largest share of that import bill, highlighting the extent to which India depends on foreign-sourced sub-systems to keep its railway network running. According to trade data and project reports for 2024–25, around 55% of railway component imports are destined for Indian Railways, while the remaining 45% serve metro and rapid rail systems. While imports still represent a relatively limited share of India's total railway component requirements, the government is clearly intent on shrinking that share further through domestic capability building. The financial commitment backing this shift is significant.