Siemens signs historic $3.25 billion locomotive deal with India

Siemens has signed a $3.25 billion contract to supply India with its service freight trains, the biggest locomotive deal in its history.

Under the deal, the German Engineering company will deliver around 1,200 electric locomotives and provide service for 35 years under the agreement, which is the biggest ever in India.

Siemens has designed 9,000 horsepower trains with a top speed of 120 km/hr that will be assembled in India's Railways Factory in Gujarat over the next 11 years, with deliveries starting in the next 24 months.

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As stated by Siemens mobility CEO Michael Peter in a press note, the new locomotives would easily be able to replace 500,000 to 800,000 trucks over their lifecycle.

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According to Michael Peter, who spoke to Reuters, the contract was a significant move for Siemens in India. He noted that the business had previously been very strong in rolling stock in North America and central Europe but mostly provided components and infrastructure in India.

"India is looking for technology, better efficiency, and a longer lifespan for its trains," he said in an interview. "In the past, India built their own trains, but they want to increase reliability and average speeds."

Keeping demand in mind, New Delhi is keen on increasing freight transport to 40-45 per cent from its current 27 per cent, while Siemens seeks this opportunity to increase its revenue, which is touted to rise 6 to 9 per cent.

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Although the Indian contract will primarily manifest as orders in 2023, Siemens CEO Peter was optimistic about achieving Siemens's aim of raising revenue at the mobility division.

In India, the largest rail market in the world with 24 million passengers per day travelling on more than 22,000 trains, he claimed Siemens was also considering other train contracts.

That India deal comes as another bumper contract for the German Engineering company, which signed a deal with Australia in December.

(With inputs from agencies)

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