General Electric (GE) announced in a press release that it has received a Letter of Award from the Ministry of Railways in India for a locomotive supply and maintenance contract.

The company will be building a new factory and supplying Indian Railways with 1,000 diesel locomotives that are worth approximately $2.6 billion over 11 years.

GE said in the press release that it will invest $200 million to build a diesel locomotive manufacturing facility in Marhowra district in the Indian state of Bihar.

The company will also be building a maintenance shed at Bhatinda in Punjab and Gandhidham in Gujarat.

Jeff Immelt, the CEO of GE, said in the press release that the project further shows "India's position as a growth engine for Asia."

"It is a major advancement and milestone for India and for GE, and a symbol of our commitment and support of the 'Make in India' initiative," he said.

Anil Saxena, a spokesman for Indian Railways, told Reuters that France's Alstom has also been picked to develop and supply 800 electric locomotives.

Saxena said that Alstom will also be building its factory in the eastern state of Bihar.

Reuters adds that Saxena said the total value of the contract with Alstom and the new factory is about 200 billion rupees, or $3 billion.

This puts the total value of GE and Alstom's contract with the Indian Railways at $5.6 billion.

Reuters adds that the contracts of the two companies are two of the firsts and the largest that India has awarded to foreign companies.

India started to allow 100 percent foreign direct investment in certain parts of its railways just last year.

Reuters adds that the initiative also comes as New Delhi is embarking on a huge modernization program.

New Delhi wants to overhaul the world's largest train network.

Reuters adds that GE and Alstom won the contract against Germany's Siemens and Canada's Bombardier Inc.