Material Insights · Understanding the Material World

Rail traction and Vehicles, ships, rail, aircraft

Rail traction is what rolling-stock builders sell: locomotives and trainsets with their motors, transformers and converters. In India, near-complete electrification of the network has turned locomotive demand almost entirely electric and pulled Siemens and Alstom into large localised factories.

Rail traction (energy) and Vehicles, ships, rail, aircraft (industry): 3 relationships.

How they are linked

1. Industry input

Physical flow · Strong · Traction systems to rolling-stock builders

A locomotive or trainset is built around its traction chain, from pantograph and transformer to converter and axle motors, so traction is the core product of rolling-stock builders; the site rates it 5 of 5 for aircraft, ship and rolling-stock builders.

  • 5 of 5 criticality for aircraft, ship and rolling-stock builders
  • €63.3 billion world rolling stock market, UNIFE study 2024
  • 3% a year forecast rail supply market growth, 2027 to 2029

UNIFE's 2024 study puts the world rail supply market at €201.8 billion, of which rolling stock is about a third. Rail is a small segment of the vehicles industry next to cars, but for rolling-stock builders the traction chain is the core of each order.

Enterprise types that depend on it:

  • Aircraft, ship and rolling-stock builders: locomotives (criticality 5 of 5)

Sources: Material Insights; Railway Supply (UNIFE data)

2. Electrification ends diesel buying

Transition · High in India · Electrified track shifts locomotive orders from diesel to electric

Once a line has overhead wires, railways buy electric locomotives rather than diesel ones, so India's electrification programme has moved its main locomotive factory to all-electric output.

  • about 99.2% share of the Indian Railways network electrified, November 2025
  • 69,427 route-km electrified, November 2025
  • 800 electric locomotives built by CLW in FY2025-26, against 700 in FY2024-25

Chittaranjan Locomotive Works built 600 locomotives at its main site and 200 at Dankuni in FY2025-26, its highest annual output. With wiring nearly complete, future demand comes from replacing older locomotives, adding freight capacity and faster passenger trains, rather than from the switch away from diesel.

Sources: The Statesman; News Station

3. Localised locomotive contracts

Policy · High in India · Indian Railways orders tie global traction makers to Indian factories

Indian Railways has bought high-power freight locomotives through long contracts that require local manufacture and maintenance, so global traction suppliers now build their equipment in India.

  • 1,200 9,000 hp locomotives ordered from Siemens for Dahod, over 11 years
  • 800 12,000 hp Alstom locomotives for Madhepura, a €3.5 billion contract
  • more than 85% Alstom components sourced locally

The Siemens contract is worth about ₹260 billion and includes 35 years of maintenance, with about 90% of the technology made in India. Alstom had delivered its 500th Madhepura locomotive by March 2025. These deals build a domestic traction supply base, but also make the two firms long-term partners of the state railway.

Sources: Railway Gazette International; Alstom

For investors

Key learnings

  1. Traction is the core of a rolling-stock order, and UNIFE's 2024 study sizes rolling stock at about €63 billion within a rail supply market forecast to grow about 3% a year in 2027 to 2029.
  2. India's network was about 99.2% electrified by November 2025, so locomotive demand is now electric, driven by freight growth and replacement.
  3. Long Indian contracts such as Siemens' 1,200 locomotives with 35 years of maintenance give suppliers steady revenue but concentrate them on one state buyer.

What to track

  • Indian Railways locomotive production: Rising output shows freight and passenger capacity expansion (Yearly · Ministry of Railways, CLW)
  • Rolling stock tenders and orders: New orders signal future traction demand for Siemens, Alstom and Indian suppliers (Monthly · Indian Railways tenders, company releases)
  • Rail freight loading: Sustained growth justifies more high-power freight locomotives (Monthly · Ministry of Railways)

For policymakers

Key learnings

  1. Electrifying about 99.2% of the network shifts rail energy from imported diesel to grid power, so traction policy and power policy are now linked.
  2. Large localised contracts have moved locomotive manufacturing to India, with local content above 85% in the Alstom deal and about 90% in the Siemens deal.
  3. With electrification nearly complete, the next gains come from locomotive power, regenerative braking and freight capacity, not new wiring.

What to track

  • Local content in rolling stock contracts: Shows how much traction value is made in India (Per contract · Ministry of Railways, company releases)
  • Locomotive deliveries against contract schedules: Delays would slow freight capacity plans (Quarterly · Ministry of Railways)

India

Indian Railways had electrified about 99.2% of its network by November 2025, and CLW built a record 800 electric locomotives in FY2025-26, alongside localised Siemens and Alstom factories at Dahod and Madhepura.

Sources

  1. Vehicles, ships, rail, aircraft: materials, Material Insights (2026)
  2. Global railway market report 2024: UNIFE's key insights, Railway Supply (UNIFE data) (2024)
  3. Indian Railways electrified about 99.2% of its network by November 2025, The Statesman (2025)
  4. CLW sets new record with 800 electric locomotives in FY 2025-26, News Station (2026)
  5. Modi flags off Indian Railways WAG-D9 electric locomotive, Railway Gazette International (2025)
  6. Alstom delivers its 500th electric locomotive in India, Alstom (2025)