IR will hold a 26% stake in the joint venture company, subject to a maximum investment of Rs 1bn. In addition to production, the joint venture will be responsible for maintaining the fleet for a period of 13 years from the start of production. The deal also includes clauses guaranteeing minimum levels of performance and transfer of technology.

Deliveries will take place at a rate of 100 units per year at a basic price of Rs 146bn, although only the first 100 locomotives will be purchased outright.

The plant is due to come online within three years and a 91.5 hectare site has already been acquired.

In addition to the locomotives for IR, the joint venture will have the freedom to manufacture locomotives for customers in other countries.

GE and EMD submitted bids for the diesel locomotive joint venture, while Alstom has been named as lowest-priced bidder for the contract to establish an electric locomotive plant at Madhepura in Bihar, which will build at least 800 8.9MW electric locomotives for IR.