Indian Railways is seeking $475m in bank loans to purchase rolling stock.
According to Railway Technology, the funding arm of the railway, Indian Railway Finance Corporation, is in talks with a group of six lenders for a $400m club loan to purchase 18,000 wagons and set up a factory to make 500 coaches a year.
The remainder $75m is expected to come from the State Bank of India and Union Bank of India.
The new wagons are part of the railways' infrastructure upgrade plans to enable it to carry more goods and compete with highways.
The railway's funding arm has opted for loans after it found money raised through bonds will cost nearly 150–200bps (0.01 percentage point).