Read about Siemens deal with India of massive $3.2 billion

Key Takeaways:

• The $3.25 billion locomotive deal was signed, according to a Monday announcement from the German engineering firm Siemens.
• As per Siemens, a telegraph line running from London to Calcutta was established in 1867 and was the company’s first commercial partnership with India.

The German engineering company Siemens announced on Monday that it had signed the largest locomotive deal in its history, worth $3.25 billion, to supply as well as maintain freight trains in India.

The contract, which is also Siemens’ largest ever in India, calls for the delivery of 1,200 electric locomotives as well as servicing for 35 years.

The 1,200-horsepower Siemens-designed trains, with a top speed of 120 km/h (75 miles/h), will be put together in Gujarat state’s Indian Railways Factory over the next 11 years, with deliveries beginning in 24 months.

“These new locomotives… can replace anywhere from 500,000 to 800,000 trucks throughout their lifecycle,” claims Siemens Mobility CEO Michael Peter.

According to Peter, the order was a significant step for Siemens in India. He noted that the company had previously been tough in rolling stock in North America and central Europe but primarily provided components and infrastructure in India.

In an interview, he stated, “India is looking for technology, better efficiency, and a longer lifespan for its trains.” India used to make trains but now wants to boost average speeds and reliability.

After agreeing to a 900 million euro contract for the latest metro line in Sydney, Australia, in December, Siemens signed the deal, the company’s most recent bumper contract.

Although this contract would primarily manifest as orders in 2023, Peter was confident in his ability to help Siemens meet its objective of growing revenue in the mobility business by 6-9% this year.

He said Siemens was also contemplating other train contracts in India, the world’s largest rail market with 24 million travellers daily travelling on more than 22,000 trains.

According to Siemens, whose first business relationship with India was a London to Calcutta telegraph line established in 1867, the government wants to increase the rail network’s share of freight transportation from the current 27% to 40-45%.