According to the World Rail Market Study 2026, rail industry companies based in EU Member States have access to just 56 per cent of the global market. Trade barriers prevent them from bidding for contracts worth approximately EUR 97 billion a year. In overseas markets, they face requirements such as local production, mandatory partnerships and technology transfer. In Europe, meanwhile, they compete primarily with Asian companies whose bids may benefit from state subsidies.
ACRI – the Association of Czech Railway Industry (a member of UNIFE, the Association of the European Rail Supply Industry) – is calling for the consistent use of European instruments to safeguard competition and for the removal of discriminatory barriers in overseas markets. By giving greater weight to the long-term economic and security implications of their decisions, public contracting authorities in the EU can strengthen European manufacturers.
“European companies need a level playing field both at home and abroad. If other countries make access to their markets conditional on local production, the involvement of a domestic partner or technology transfer, the European Union cannot ignore this imbalance. This is a critical issue for Czech manufacturers: approximately half of the Czech rail industry’s output is exported. These barriers affect not only train deliveries, but also signalling equipment, rails, turnouts and other infrastructure components,” says Marie Vopálenská, Director General of ACRI.
Local production and licensing requirements restrict access to overseas contracts
European companies face various barriers in markets outside Europe. Participation in tenders may be conditional on local production, a specified share of domestic components, cooperation with a local partner or technology transfer. Unpredictable licensing procedures can also complicate market access. A European supplier may therefore be forced to move part of its production to the destination country and share its know-how simply to be eligible to bid.
A 2023 OECD study described restrictions in China limiting participation in rolling stock procurement to Chinese-controlled companies, requirements to establish joint ventures with local partners, and licensing procedures without clearly defined criteria. For high-speed trains, market access between 2004 and 2006 was also conditional on local assembly and technology transfer.
In India, the Make in India policy favours domestic suppliers according to their share of local value added. As a general rule, companies with at least 50 per cent local content qualify as Class-I local suppliers, although individual ministries may set higher thresholds. In the signalling sector, the required local content exceeds 70 per cent.
Türkiye, whose companies participate in tenders for trolleybuses and other transport equipment in EU countries, including the Czech Republic, also imposes requirements for local production and the involvement of domestic suppliers. For urban rail vehicles, the mandatory minimum local content is 51 per cent. For high-speed trains, requirements include technology transfer and production localisation of 53–74 per cent.
Saudi Arabia also promotes the localisation of manufacturing and services. For European companies, this can restrict direct exports from EU factories or entail additional costs.
Chinese companies received more than 80 per cent of USD 5 billion in subsidies over five years
In its study of the rolling stock supply chain, the OECD examined 22 companies whose combined revenues in 2020 represented more than 70 per cent of the global rolling stock market. It identified approximately USD 5 billion in total government support between 2016 and 2020, in the form of grants, tax concessions and preferential loans. CRRC accounted for as much as 72 per cent of the support identified, with a further nine per cent going to Chinese signalling manufacturer CRSC.
The EU must make consistent use of its tools to safeguard fair competition
“Preserving know-how and manufacturing in the EU requires four key approaches: scrutinising foreign subsidies, using the International Procurement Instrument to respond to discrimination against European suppliers, upholding the principle of reciprocity, and assessing contracts on the basis of their long-term implications. Alongside the purchase price, we need to consider whole-life costs, the availability of servicing, cybersecurity and security of supply. We must also take account of the impact on European jobs, research and subcontractors. The aim is to ensure fair competition in an open European market,” says Marie Vopálenská, Director General of ACRI. She adds: “When examining competitive conditions, particular attention should be paid to countries such as Türkiye, China and India.”
Specific cases from recent years illustrate how these instruments can be applied.
The IPI addresses barriers to European companies bidding for public contracts
The International Procurement Instrument (IPI) enables the Commission to investigate discriminatory barriers that prevent European suppliers from accessing public procurement in third countries and to negotiate their removal. If the situation is not remedied, it may, subject to specified conditions, restrict access to EU public procurement for suppliers from the country concerned.
The Commission adopted its first such measure in June 2025 in the medical devices sector. Where the relevant conditions are met, the IPI can also be applied to public procurement in the rail industry.
Scrutiny of foreign subsidies in Portugal and Bulgaria
In a contract worth approximately EUR 600 million for a new light rail line in Lisbon, the European Commission concluded that foreign subsidies granted to Portugal CRRC Tangshan, the subcontractor supplying 12 vehicles, had given the Mota-Engil consortium’s bid an unfair advantage. In April 2026, it therefore cleared the award of the contract on condition that China’s CRRC was replaced by Poland’s PESA. PESA subsequently withdrew, however, and according to information available in October 2026, the consortium was seeking another supplier. The contract therefore remained unawarded. The case shows that foreign subsidy scrutiny can also lead to the replacement of a subcontractor. For the CRRC group, this is the second such case, following an earlier investigation in Bulgaria.
In Bulgaria, the Commission launched its first in-depth investigation under the same regulation in February 2024. It concerned a bid by CRRC Qingdao Sifang in a tender for 20 electric trains and 15 years of maintenance, with an estimated value of approximately EUR 610 million. The company subsequently withdrew from the tender.
Participation of third-country suppliers in public procurement
The judgment of the Court of Justice of the European Union of 22 October 2024 in the case concerning Turkish construction company Kolin confirmed that suppliers from third countries which have no relevant agreement with the EU on reciprocal and equal access to public procurement cannot claim a right to equal treatment under the EU procurement directive. In the absence of applicable EU rules, the contracting authority decides whether to admit such suppliers to an individual tender.
For example, in its 2025–2026 tender for up to 160 trams, Warsaw tram operator Tramwaje Warszawskie explicitly excluded manufacturers from countries outside the EU and the European Economic Area. Turkish companies were therefore unable to bid.
An Austrian case highlights economic and security risks
Following the approval of CRRC trains for operation by Austrian operator Westbahn, Austria’s Minister for Mobility, Peter Hanke, warned of the risks of losing domestic value added and jobs, as well as increasing dependence on third countries. He highlighted the implications for European manufacturers and their supply chains, and also raised questions about control over critical infrastructure software, technological dependence and the security of long-term train operations.
“The aim is not to close the European market, but to ensure that the same rules truly apply to everyone operating in it, and that Europe’s own companies are not discriminated against. These companies employ tens of thousands of people in their home regions, place orders with European subcontractors and pay taxes in the EU,” stresses Marie Vopálenská.
