Trade on track: Russia looks up to India for train manufacturing to meet domestic demand

Russia eyes to deepen its trade ties with India — one of the top economies still in robust trade with the country after its President Vladimir Putin ordered the invasion of Ukraine 36 months ago. Now, Putin looks to invest in India’s locomotive industry.

The exponentially expanding trade and cooperation between India and Russia may soon get a new boost with the two friendly nations looking set to sign a pact on rail manufacturing.

According to a report by Times of India, Russia is eagerly looking forward to investing in train and component manufacturing facilities in India as Moscow aims to cater to its growing domestic demand.

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Interestingly, this comes within a week after an expression of interest from Russian railway major TMH.

Russia wants railway supplies from India

The report quoted an unnamed top Indian government official as saying that Russia has “huge domestic requirements” and for that it wants to set up manufacturing facilities in India.

“They want to get these supplies from India,” he was quoted as saying.

Why does Russia want to invest in Indian train production?

Speaking to a group of Indian journalists in Moscow, Kirill Lipa, the CEO of TMH, listed three reasons why Russia is interested in investing in and expanding train and component manufacturing in India for its domestic use.

1 - “The current interest rate in India is very different from other countries. So, we are interested and ready to invest in India,” he said.

2 - “We are interested in developing several facilities in India, which are capable of providing certain components,” Lipa said.

3 - “We think some of them can be supplied to the Russian market as well,” he said.

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Lipa also revealed that Russia already has several supply contracts from India. “We have a historically good relationship with suppliers there (India) and that means we can increase this import into Russia from India," he said.

The TMH boss also confirmed that his company has been sourcing parts outside of Russia for the project. “We found basic suppliers within India or some other countries which are more or less oriented for the relationship between India and Russia,” he said.

Lipa said that the current sanctions on Russia will not impact the project in any way.

TMH is the major stakeholder in Kinet Railway Solutions, which holds approximately Rs 55,000 crore contract with Indian Railways to produce 1,920 Vande Bharat sleeper coaches as well as maintain them and for 35 years.