NEW YORK—Multinational conglomerate, GE, has penned its largest-ever deal in India. The company has signed a US$2.6 billion supply and maintenance agreement that will see it supply Indian Railways with 1,000 diesel locomotives.
In conjunction with the deal, GE will invest $200 million to build a diesel locomotive manufacturing facility in India’s Bihar state. The company said the effort is a “major boost” to India’s railway modernization. In addition to the manufacturing facility, which will be located in the Marhowra district, GE will build maintenance sheds at Bhatinda in Punjab and Gandhidham in Gujarat.
“This infrastructure project is further evidence of India’s position as a growth engine for Asia,” GE chairman and CEO, Jeff Immelt, said. “It is a major advancement and milestone for India and for GE, and a symbol of our commitment and support of the ‘Make in India’ initiative.”
GE noted that last year, the Indian government allowed 100 percent Foreign Direct Investment in the country’s railway sector. The significant GE investment will provide skill development opportunities for local talent, according to the company.
“This project combines GE’s deep infrastructure and manufacturing expertise with India’s growth priorities. This is an exciting and integral part of our localization strategy in India,” Jamie Miller, GE Transportation CEO, said. “We are excited about working with Indian Railways and continuing to invest in the region.”
GE plans to establish a joint venture with Indian Railways before breaking ground on the manufacturing facility.
Meanwhile, the 1,000-locomotive contract spans 11 years.