The Chamber of Railway Industries (Rail Chamber) proposes the following fiscal and policy measures to the Ministry of Railways and the Ministry of Finance to ensure the Indian Railway Industry remains the "Engine of Viksit Bharat."

1. Dedicated "Rail Safety & Kavach" Fund

With the government considering a record safety outlay exceeding ₹1.3 lakh crore, we recommend:

  • Vendor Diversification Grants: Incentives for the 20+ new OEMs expected to enter the Kavach ecosystem in 2026 to accelerate the rollout to the 78,000 km broad-gauge network.
  • Technology Absorption Subsidy: A 15% weighted deduction on R&D for indigenous development of SIL-4 certified safety components.

2. Fiscal Support for Rolling Stock OEMs

To support the manufacturing of 200 new Vande Bharat and 100 Amrit Bharat trains:

  • Predictable Procurement Guarantee: A commitment to a 10–12% annual increase in capital expenditure (projected at ₹2.75 lakh crore) to provide long-term order book visibility.
  • Rationalization of GST on Parts: Correcting the "Inverted Duty Structure" where raw steel/electronics are taxed higher than the 5%–12% rate applied to finished railway wagons/coaches.

3. MSME Empowerment & "Last Mile" Capacity

  • TReDS Mandatory Integration: Making it mandatory for all Railway Production Units (ICF, RCF, MCF) to settle MSME invoices via the TReDS platform within 45 days.
  • Credit Guarantee Scheme: A specialized ₹5,000 crore "Railway MSME Fund" to provide low-interest working capital for suppliers involved in high-gestation projects like the Mumbai-Ahmedabad Bullet Train.

4. Export Incentives (Make in India for the World)

  • Duty Drawback Enhancement: Increasing duty drawback rates for the export of Locomotives and Passenger Coaches to compete with subsidized global players.
  • Global Certification Subsidy: Reimbursing 50% of the costs incurred by Indian MSMEs for obtaining international certifications (IRIS, EN 15085, and ISO 22163).

5. Green Energy & Sustainability

  • Hydrogen Propulsion Pilots: Allocation for at least 5 pilot corridors for Hydrogen-powered trains to meet the "Net Zero 2030" target.
  • Battery-Shunting Rebates: Tax holidays for manufacturers developing Li-ion and Solid-State battery-powered shunting locomotives.

Advocacy Goal

Our goal for Budget 2026-27 is to ensure that the Operating Ratio (projected at 98.43%) is improved by reducing input costs for manufacturers, thereby lowering the overall procurement cost for Indian Railways.