Indian Railways is a fully vertically integrated system. It not only owns and maintains its infrastructure and operates its trains, but also manufactures its rolling stock. There are six production units in Indian Railway, which are:

• • Chittaranjan Locomotive Works at Chittaranjan which manufactures electric locomotives.

• • Diesel Locomotive Works at Varanasi which manufactures diesel locomotives.

• • Integral Coach Factory at Chennai which manufactures passenger coaches.

• • Rail Coach factory at Kapurthala.

• • Wheel and Axle Plant at Bangalore.

• • Diesel Component Works at Patiala which in addition to manufacturing components for diesel locomotives has off late also started rehabilitation of diesel locomotives.

Some new production units are also proposed to be set up such as:

• • Forged wheel factory at Rae Bareli in collaboration with Rashtriya Ispat Nigam Ltd.

• • Mainline Electrical Multiple Units (MEMU) facility at Bhilwara in Rajasthan in collaboration with Bharat Heavy Electricals Limited (BHEL).

• • A coach manufacturing unit in Sonepat, Haryana.

• • Locomotive factories at Madhepura and Mahrora in Bihar.

• • Wheel factory at Chhapra in Bihar.

• • Axle factory at Jalpaiguri in Assam.

• • MEMU/DEMU factory at Kancharapara in Bengal.

• • A Coach factory in Kerala, etc.

Setting up more and more manufacturing units is announced in the Railway Budget every year.

Manufacture of wagons is entirely in the private sector. All the production units are fully owned and controlled by the Ministry of Railways. They are captive units producing only for Indian Railways, though some locomotives have been exported to Bangladesh, Thailand and South Africa. Indian Railways is self-sufficient with respect to rolling stock. Some higher capacity locomotives have been imported in the past.

All production units are headed by a General Manager reporting directly to the Member Mechanical in the Railway Board except for the General Manager of Chittaranjan Locomotive Works who reports to the Member Electrical. The middle and senior management personnel are drawn from the open line cadre of Indian Railways who revert to the open line after a few years. Thus, the personnel in the production units and open line are interchangeable except for the employees up to the senior supervisory level.

Being a part of Indian Railways acts as a hindrance to the realisation of the full potential of the production units.