By 2020, the Railways needs to procure 5,334 diesel locomotives and 4,281 electric locos, spending an estimated Rs 1,20,000 crore. Given that its production units are overburdened, the Railways has decided to procure locos through public private partnerships. The Railways also does not have the resources to adequately fund its massive capital expansion needs on its own, given a surging wage bill which has significantly inflated its overheads.
The Railway Board will soon finalise a tender, to be opened in a few months, for procurement of electric locomotives vis-a-vis a joint venture with the private sector in Madhepura in Bihar. Another tender for a similar diesel loco manufacturing plant may also happen this year. Together, the two contracts are said to be...
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worth around Rs 40,000 crore spread over a supply period of 10 years.

This is why Bombardier, Siemens, GE, Alstom and EMD have all become aggressive about their presence here. Several cities in India are also constructing Metro rail system, which opens up an additional market for these companies which manufacture coaches, locomotives, signalling systems, etc.
Bombardier for instance has set up a new railway vehicle manufacturing site at Savli, Vadodara, Gujarat.
GE India has announced plans to set up a facility that will also manufacture diesel locomotives in Maharashtra with an investment of Rs 1,000 crore.
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"We are targeting India. We will participate in the tender to be floated soon by the Indian Railways for 1,000 electric locomotives. We are willing to offer 10% cheaper rates than other companies," Alstom's locomotive platform director Jean-Marc Tessier had said in an interview earlier in France.
While EMD has been a long-standing technology partner for diesel locomotives with the Railways, Siemens too plans to cash in on the opportunity.