Page 36 - CII Artha Magazine

Sector in Focus
Developing a Progressive
and Sustainable
Rail
Manufacturing
& Technology
Ecosystem
Indian Economy: Indian manufacturing sector is
expected to shoulder a large
The Path Ahead part of the responsibility of
facilitating the required GDP
push and in meeting the
A fter 75 years of earlier mentioned targets. This
sector currently accounts for
independence, India has
become the fifth largest ~15 per cent of the country’s
GDP and less than 2 per cent
economy in the world, a of global manufacturing. This
beacon of hope in an share could further be
otherwise unstable global enhanced, with the right
scenario. The country is poised
to be the fastest growing large
economy in the near future Government
with one of the world’s most
lucrative markets, driven by an
aspirational population with
increased spending power and
desirous of an improved
standard of living. The
government has been initiating
to meet these aspirations
through major infrastructural
investments, focus on
technological advancements,
and a slew of policy
interventions, all set to
transform the nation into a
“New India” and enable it to
reach the goal of being a US$5
trillion economy by 2025 and
US$20 trillion by 2047.
36 ANALYSIS, RESEARCH, THOUGHT LEADERSHIP & ADVOCACY
QUARTERLY JOURNAL OF ECONOMICS
MAY 2023
reach 1.5 billion by 2030,
logistic support for various with major expansion in tier Developing • Enhancing Domestic with commercial capacity plant set up at Bina planned to run on select can accrue over a time cycle
as long as 35 years with the
narrow gauge or heritage
technological capabilities
organizations and global
need to be looked at. These
industries but has also enabled
Industry
2 and 3 cities. The increase
need to go beyond pilot
research institutes, market
routes.
application of better
the urbanization of rural areas
of the country. in urban passenger traffic In the current scenario need-based developments, models and implementation • OPEX based models technologies. This will also
where the know-how of
requirement of new types of Ecosystem for
focus on ease of
taken up at a large scale,
has initiated the
encourage vendors to keep
critical technology is
government, over the past few Air-Conditioned Electrical Growth of concentrated in the hands of development of human land bank beside the railway Recently several mega The outlook for the Indian
At this backdrop, the
implementation, and
which will also use the huge
working on upgrading their
offerings and help in building
rolling stock such as
a few global OEMs, it is
tenders for rolling stock
years, has identified and
capability.
resource competence for
tracks that is presently lying
Rail-based
pertinent that a level playing
have come out on the
unutilized.
the industry.
Multiple Units (EMUs),
developed plans for a
field for homegrown
MCMA (Manufacturing cum
generational change in in the
Mainline EMUs, RRTS,
sector, majorly focusing on Monorail, Metrolite and Neo Economy companies is created. Make • Transitioning towards Newer green technologies Maintenance Agreement) railway industry is very
In India policy is being
model, with 35-year
metro. To further expand
infrastructure upgradation,
greener and more efficient
like green hydrogen and
optimistic, but at the same time
implemented in all tenders,
maintenance included in the
induction of state-of-the-art
is also creating challenges for
the network of railways and
technologies
battery-operated rolling
its contribution is more
scope of the equipment
Execution and
rolling stock, greater
stock are also being
players in the sector. It is the
metros in small cities with
deployment of population of over 2 million, implementation of new perspective and does not ambitious target of being a explored. However, with supplier. While these provide right time for the industry to
from the manufacturing
The Railways have taken an
visibility and scale to
products and models,
solutions for Light
come together and collaborate,
telecommunications &
most tracks already having
Net Zero Carbon emitter
necessarily ensure the
vendors, these tenders are
and fora like CII, provide the
Rail/Monorail are under
information technology, and
been electrified, their
creation of railways
transfer of technology. To
by 2030. To support this
purely CAPEX driven, and
exploration.
necessary and much required
deployment needs to be
moving towards greening the
manufacturing ecosystem
vision, it has embarked upon
railways. • Innovative Business Models would be essential. This clarion call for an aggressive electrification viewed holistically, as this determined based on the platform for the same. A
support Hon’ble PM’s
lowest price of the
would require huge
symbiotic relationship between
could be possible through:
Aatmanirbharta, it is
drive of its broad-gauge
equipment quoted. To reap
the railways and the industry
investments by suppliers in
Some of the themes that
essential that domestic
tracks for reducing
Model of Public Private
the advantage of newer and
both capacities and
will pave the way in the
participants will indeed lend
Partnership in train
coming years are:
Participation
However, to further reduce
operations is being • Greater Industry companies are supported by dependence on fossil fuel. capabilities and should have efficient technologies, these power and speed to the
way of favorable contractual
need to be evaluated on a
reworked by government to conditions for technology emissions, direct feed solar the volumes to support the successful implementation of
• Logistics and Cost provide assorted projects Industry participation at absorption and friendly plants for traction same. At present hydrogen mix of both CAPEX & the grand vision both have for
Effectiveness the planning stage would operated trains are being OPEX, as huge advantages the nation.
for the private sector that qualification criteria, applications like the 1.7 MW
National Rail Plan (NRP) would bring in investments, align the demand cycle especially for new
2030 focuses on capacity modern and clean with supply capabilities. developments. The
Visibility of high demand
technology. This model is
development of KAVACH is
building to increase rail
share in freight, leading to also expected to improve over the long term, along a success case that
with the stability of policy
demonstrates the cost
lower fuel consumption and
the operational efficiency of
environmentally sustainable the railways. Railways has will ensure suppliers plan advantage and the capability
investments, capacities and
THE INDIAN solutions. also adopted long term capabilities accordingly. This of domestic suppliers, and
manufacturing cum
such models need to be
RAILWAYS, WITH ITS
HUGE ANNUAL • Faster, safer, and newer maintenance model for will ensure continuous and expanded and replicated.
smooth availability of
technologies
big-ticket procurements like
BUDGETS CAN PLAY the recent tenders for Vande products/ systems for the There are very limited
A MAJOR ROLE IN Capital investments targeted Bharat Trainsets. railways, without creating approved vendors for some
SUPPORTING THIS at railway track crucial components/
initiatives taken by SEGMENT electrification, upgradation • Policy Initiatives stress in the supply chain. assemblies, this could create
both the and expansion of rail bottlenecks which may
network, dedicated freight The Gatishakti initiative, is Indian Rail equipment require timely resolution. A
and private instance, PLI incentive The pivotal corridors, procurement of expected to further industry is largely working shorter time for approvals,
sector in scheme, promoting advanced rolling stock, strengthen and integrate in an environment where a (e.g. by reducing field trial
tandem. ease of doing domestically developed train transport infrastructure. single benefactor buyer times, etc.) may be adopted
For business and role of Indian protection and signaling Likewise, ’Mission Raftaar’ is determines the contract on case-to-case basis,
increased Railways as system, etc. would uplift the expected to enhance the terms. The very nature of depending on the criticality
penetration of face of the Indian railways. speed with initiatives such as such a structure warrant of the item.
technology, could Conceptualization of bullet dedicated freight corridors. that the involvement of all
strengthen the the growth train and the new semi &
manufacturing high-speed Vande Bharat stakeholders is ensured in • Collaborative Technology
sector, going driver trains along with the THE RAILWAYS ARE policy formulation to avoid Excellence
ahead. indigenous development of ACTIVELY PROMOTING undermining the interests To develop a growth and
Indian Railways is the largest KAVACH are already THE 'AATMANIRBHAR of suppliers. Frequent value-enabled manufacturing
railway network in Asia and generating unprecedented BHARAT' AND MAKE industry feedback and a ecosystem, establishment of
the fourth largest in the world. investment attraction in the IN INDIA MISSION collaborative approach national centers for
Not only has it provided country. THROUGH AN would be necessary for the technology excellence need
OVERHAUL OF ITS success of the novel to be explored which shall
• Diverse Urban Solutions endeavors of Indian focus on development and
Ms. Bani Varma, Executive Director POLICIES Railways. applied research, partnership
(Transportation Business and Electronics Division), BHEL Indian population is likely to
ANALYSIS, RESEARCH, THOUGHT LEADERSHIP & ADVOCACY 37
QUARTERLY JOURNAL OF ECONOMICS
MAY 2023