Indian government owned and operated Indian Railways has projected that its demand for forged wheels will increase from 72,000 units in 2017-18 to 104,500 in 2020-21 and further to 130,000 in 2023-24, a government official said on Tuesday.
He said that of the total forged wheel demand, Indian Railways is currently sourcing 48,000 units from Steel Authority of India Limited (SAIL), while the balance is being imported.
However, with domestic installed capacity of forged wheel forecast to increase to 170,000 units per annum, it is expected that Indian Railways will not have to resort to imports within the next five to six years.
Meanwhile in a related development, SAIL and Rashtriya Ispat Nigam Limited (RINL), both government owned steel producers, at behest of Ministry of Steel have agreed to share equally all forged wheel orders that will be placed by Indian Railways, the official said.
It might be noted that RINL is setting up a forged wheel plant in northern Indian province of Uttar Pradesh entailing an investment of $188 million. The investment has been based on a 100 percent buyback assurance from Indian Railways. The RINL forged wheel plant has been scheduled for commercial production by end 2018.
However, SAIL which also operates a forged wheel plant at its Durgapur Steel Plant in eastern Indian province of West Bengal objected to RINL’s investment based on assured buyback from Indian Railways as it feared it will impact off-take from the Durgapur Plant.
The Ministry of Steel intervened and laid down that all Indian Railway forged wheel orders will be shared between SAIL and RINL and that the latter will not expand capacity of its plant beyond 100,000 units of forged wheel per annum unless demand from Indian Railways exceeded current projections, the official added.