Business & Economy

Explained: Multi-Billion-Dollar India-Russia Venture to Produce Vande Bharat Trains Kicks Off

© Photo : Twitter/ @sambitswarajPM Narendra Modi flags off Odisha’s first Vande Bharat Express
PM Narendra Modi flags off Odisha’s first Vande Bharat Express - Sputnik India, 1920, 19.07.2023
The Vande Bharat is a set of semi-high-speed trains that have been running on various routes in India since February 2019.
The Indo-Russian venture to manufacture Vande Bharat trains has started after almost three months of delays over the discussions of majority stake ownership in the company.
As per the information provided by India's state-run Rail Vikas Nigam Limited (RVNL), Kinet Railway Solutions Limited, a unit of the RVNL, and Russia's Metrowagonmash and another joint ownership firm Locomotive Electronic Systems, have signed a "share purchase agreement."

Who Owns What?

The disclosure made by RVNL states that under the deal agreed by all the parties, the RVNL will hold a 25 percent stake in the joint venture.
On the other hand, Russia's Metrowagonmash will have the majority ownership in the firm with a 70 percent stake. The remaining five percent will be controlled by Locomotive Electronic Systems.
Previously, it appeared as if the deal may not go through as RVNL was insisting that it should hold the majority stake in the joint venture.
In this photo taken on February 15, 2019, Indian Prime Minister Narendra Modi (2nd L) flags off India's first semi-high speed express train Vande Bharat Express at New Delhi Railway Station.  - Sputnik India, 1920, 31.03.2023
Indo-Russian Relations
Indian-Russian Joint Venture Awarded Contract to Manufacture 120 Vande Bharat Trains
The reason behind RVNL's "majority stake ownership" demand was the smooth functioning of the project given that spares for these state-of-the-art trains that feature advanced features are sourced from Western European nations.
With Western countries slapping economic sanctions on Moscow following its special military operation in Ukraine, it would not be easy to import items that are vital to produce the trains.
In this context, RVNL wanted operational control over the joint venture. However, this demand of the Indian Public Sector Unit (PSU) was rejected by the Russian side.
Under the joint-venture framework, the RVNL-Metrowagonmash combo will build 120 Vande Bharat trains for the Indian Railways. The cost of a single unit is pegged at $14.6 million.

What Distinguishes Vande Bharat from Other Trains?

With an array of modern features, the Vande Bharat trains are revolutionizing the way people travel in India.
Besides saving time due to their average speed of 110 to 160 km per hour, these trains also offer amenities like onboard WiFi, rotating chairs, a GPS-based passenger information system, and automatic doors for boarding-deboarding purposes.
The average speed of conventional trains, which do not offer this range of features, is between 80-85 km per hour.
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