Indian ministries clash over rail imports

India's steel and rail ministries are at loggerheads over the state-run network's proposal to buy much-needed rails from overseas, a move that would undermine Prime Minister Narendra Modi's drive to build key infrastructure in India.

India's Ministry of Railways, which manages the world's fourth-largest rail network, has grappled with a spate of accidents. Modi's government wants to overhaul the country's aging tracks, but shortages of steel produced by state-run Steel Authority of India Ltd (SAIL) have slowed progress.

The clash highlights the dilemma the government faces as it tries to promote local production through the “Make in India” campaign at the same time it faces resistance from some state buyers who need to procure goods as quickly and cheaply as possible.

Indian Railways issued a tender seeking 717,000 tonnes of steel rails on Oct. 18, which was the first time the state-run railroad operator sought overseas rails. The tender could be worth an estimated 30 billion rupees ($464 million) for global steel majors such as ArcelorMittal and Thyssenkrupp.