Kavach, the indigenous train collision avoidance system that is being deployed across sections of the network, is not only the most visible symbol of railway modernisation but also part of a much larger shift taking place behind the scenes.
Across signalling, electronic interlocking, train protection, communication systems and digital traffic management, Indian Railways is increasingly investing in technologies that improve operational safety and efficiency. At the same time, a growing number of domestic firms are attempting to move beyond installation and integration work to develop the technologies themselves—a space that has historically been dominated by multinational suppliers and public-sector expertise.
The transition is being driven by multiple factors. Indian Railways is undertaking one of the largest modernisation programmes in its history, government policies have placed greater emphasis on self-reliance in strategic sectors, and demand for advanced safety systems is rising as the rail network expands capacity and traffic volumes.
Are Indian Private Players Ready to Challenge Global Giants in Railway Signalling?
For much of the past two decades, private Indian companies largely operated as engineering partners, service providers or system integrators in railway signalling projects. Core technologies, particularly in safety-critical areas, were often sourced from global players with decades of experience and established certification records.
Speaking to Financial Express, Sourajit Mukherjee, Director & CEO of Nova Control Technologix and CEO of e2E Rail, said the railway technology ecosystem is approaching an inflection point as companies increasingly invest in product development and intellectual property.
“Traditionally, the ecosystem was dominated by public sector units and global OEMs, with Indian private players contributing primarily through design services, both for domestic and international projects, and limited system integration roles. However, with the Government’s strong push toward self-reliance, the industry has reached an inflection point. Private companies have increasingly recognized the need to transition from system houses to full-fledged OEMs.”
The shift mirrors developments seen in other technology-intensive sectors where Indian firms are attempting to move up the value chain by developing proprietary platforms rather than relying solely on execution contracts.
Mukherjee argues that railway technology is now experiencing a similar transformation.
“At the same time, the broader deep-tech transformation across industries has begun to reshape the railway sector as well. As one of the fastest-growing infrastructure segments, railways are now seeing private players invest meaningfully in R&D, pursue strategic M&As, and focus on indigenous product development and manufacturing. The shift is not just toward execution excellence, but toward owning technology, platforms, and intellectual property.”
The opportunities extend beyond Kavach. As Indian Railways expands deployment of electronic interlocking systems, modern signalling infrastructure and digital monitoring tools, demand is emerging for indigenous hardware, software, testing capabilities and lifecycle support services.
In a separate interaction with Financial Express, Jayaraj Rajapandian, Head of Aerospace, Rail and Off-Highway at Tata Elxsi, said the policy environment has become more supportive of domestic participation.
“Policies are very strong to encourage Indian Ecosystem Contribution today compared to any time in the past in Defence, Rail and other major infrastructure sectors. It enables advanced systems and solutions accessible and affordable to the railway ecosystem. As Indian Railways accelerates signalling modernisation and safety upgrades, domestic companies have strong opportunities in developing systems, integration, testing, commissioning and manufacturing building long-term support ecosystems in India.”
He notes that opportunities are emerging not only in train protection systems but also in testing infrastructure, predictive maintenance, communication systems and cybersecurity.
“The ecosystem is emerging in testing infrastructure, talents and large-scale rollout readiness, and these gaps are also opportunity space. Domestic firms that invest in R&D, quality systems, qualification test labs, independent safety assessment and cybersecurity-ready platforms will be well positioned to serve this market. Beyond Kavach, there is room in electronic interlocking, communication systems, predictive maintenance and training-led support services for railways.”
Moving past challenges in building safety-critical technology
Yet railway signalling is unlike most infrastructure sectors. The challenge is not merely manufacturing equipment but proving that it can operate safely under all conditions.
Products deployed on railway networks must undergo rigorous testing, certification and validation before they can be approved for operational use. Functional safety standards, long asset lifecycles and strict regulatory oversight create significant barriers for new entrants.
Mukherjee says the sector’s complexity is often underestimated.
“Railway signalling is one of the most safety-critical domains in transportation, and developing indigenous technologies requires much more than building a product. Indian companies must navigate stringent approval processes, SIL-4 functional safety requirements, exhaustive laboratory and field validation, and ensure long-term supportability over asset lifecycles that can extend beyond 25 years.”
Rajapandian points to quality systems and testing infrastructure as critical requirements for firms seeking to scale in the sector.
“Indian firms need strong quality processes, traceability, functional safety discipline and robust test infrastructure. Early collaboration regulatory bodies like RDSO, experienced integrators and independent assessors are essential to reduce risk and speed up acceptance.”
The significance of these challenges is reflected in the structure of the global railway signalling market itself. Worldwide, safety-critical railway technologies have traditionally been concentrated among a relatively small number of companies because of the time, investment and certification requirements needed to bring products to market.
For India, therefore, the next phase of railway modernisation may be as much about capability building as infrastructure deployment.
Mukherjee believes India’s combination of engineering talent, manufacturing capacity and policy support could eventually position the country as a developer—and exporter—of railway safety technologies.
“Over the next five years, I firmly believe India will transition from being predominantly a consumer of railway safety technologies to becoming a significant developer and exporter of such systems.”
‘Market will likely remain mixed, but gravity can shift significantly in favour of Indian firms’
Rajapandian expects the transition to be more gradual but sees increasing room for domestic firms to play a larger role.
“The market will likely remain mixed, but the gravity can shift significantly in favour of Indian firms if continuous investments and government policies to encourage. Partnership with global player will accelerate the maturity of solutions and Indian companies can continue to anchor safety sensitive and deployment heavy markets.”
As Indian Railways rolls out Kavach, expands electronic interlocking and upgrades signalling infrastructure across its network, the broader question is no longer whether domestic companies can participate in railway modernisation. The bigger test is whether they can build the technologies that underpin it.
If they succeed, India’s railway safety push could eventually become more than a story about safer train operations. It could mark the emergence of a domestic industry capable of designing, manufacturing and exporting the next generation of railway safety systems.
From Kavach to signalling: The listed companies in the ecosystem
Railway technology and engineering stocks are also likely to remain in focus as Indian Railways expands the rollout of Kavach, electronic interlocking and other signalling modernisation projects. Listed companies with exposure to various segments of the railway safety ecosystem include Tata Elxsi, HBL Engineering, Bharat Electronics (BEL), RVNL and BEML, although their involvement varies across signalling, train protection, communication systems, electronics and rail infrastructure.