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Railway sector SMEs need upskilling, technology upgrades, and financial help: EY-FICCI report

August 30, 2018

Small and Medium Enterprises (SMEs) have an important role to play in the Indian Railway sector, and in terms of current technology, Indian SMEs are well-equipped to meet the needs of the Indian Railways, according to a recent EY-FICCI report.

Over 10,000 SMEs are registered on the Indian Railways procurement portal and can play key roles in the railway sector manufacturing.

However, stating that SMEs in India need to be able to rise up to the needs that a modern railway system boasts of, the report suggests they focus on the following aspects.

SME readiness:

Upgrades in technology will comprise indigenous innovations and technology transfers. If new designs are introduced, SMEs need to be ready to supply as per the new specifications. If new technology is introduced through a JV mechanism, local procurement conditions will need to be seen while also considering the expertise of the existing vendor base.

Skilling and technology upgrade of SMEs:

After assessing the vendor base, there is a need for programmes for upskilling and technologically-upgrading SMEs. Since Original Equipment Manufacturers (OEMs) will need to ensure higher levels of quality standards and precision, educating SMEs on required tool sets, manufacturing methods and processes is required.

Financial assistance to SMEs:

Currently, there is no program in place to offer financial support to the SMEs in the railway sector. Further, there are significant investments that SMEs make in product development or process improvement to meet new requirements. This needs to be addressed as newer technologies are introduced in the railways.

According to the report, the Indian Railways carries around 1.2 billion tonnes of freight annually and over 23 million passengers everyday. It also urges the government to boost India’s share in the global rail market.


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