New sourcing rules to ensure metro cars are made in India

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Soon, the Metro would sport the Made-in-India tag. To help achieve the federal objective of making the South Asian nation a manufacturing hub, New Delhi has set local procurement norms for the entire value chain of the Metro commuter services running in various cities.

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The new tender conditions and standardized norms for a wide range of equipment have been approved by urban development minister M Venkaiah Naidu, and they come into effect immediately.

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For procurement of over 100 cars, a minimum 75 per cent of tendered quantity must be manufactured indigenously, with progressive localization: The contractor needs to either establish independent factories in India, or partner with local vendors, to meet the new sourcing standards.

Across the country, 1,912 metro coaches are currently operational, and India immediately needs another 1,420 cars. Over the next three years, more than 1,600 Metro cars would be required. Each coach is estimated to cost about Rs 1000 million.

The localization initiatives are designed to prompt companies to establish factories in India. These are also expected to remove variations in the present technical norms for rolling stock and signaling equipment, helping in turn to cut costs through anticipated economies of scale.

The ministry has also concluded the pending standaridisation of norms for rolling stock and signaling equipment applicable to over 90 per cent of the current imports.

Also, to promote local manufacturing, it has stipulated that nine types of signaling equipment be procured locally. Metro companies have also been directed to develop the maximum possible local competence so that technical support is available within the country.

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