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In 1832 the proposal to construct the first railway line in India at Madras was made. In 1835, a railway track was constructed between Red Hills and Chintadripet in Madras and became operational in 1837. It was hauled by a rotary steam engine imported from England and was used for ferrying granite.

The railway bridge near Thane in 1855

Railway map of India in 1865

The Madras Railway was established in 1845 and the Great Indian Peninsular Railway was incorporated in 1849. Temporary railway lines were built such as the railway line at Dowleswaram built by Arthur Cotton to supply stone for the construction of a dam over the Godavari River in 1845 and the Solani aqueduct railway, built by Proby Cautley in Roorkee to transport construction materials for an aqueduct over the Solani river in 1851. In 1852, a steam locomotive imported from England was tried at Byculla. In 1853, the first passenger train on 1,676 mm 5 ft 6 in broad gauge ran for 34 kilometres 21 mi between Bombay and Thane which had 14-carriages carrying 400 people, hauled by three steam locomotives: the Sahib, Sindh and Sultan. This day is considered to be the formation date of the Indian Railways and is marked annually as Indian Railways Day.

The Thane viaducts, the first railway bridges, were built over the Thane creek when the Mumbai-Thane line was extended to Kalyan in May 1854. Eastern India's first passenger train ran 39 km 24 mi from Howrah, near Kolkata, to Hoogly on 15 August 1854. The construction of the first main line in South India between Royapuram in Madras and Arcot started in 1853, which became operational on 1 July 1856. On 24 February 1873, a horse-drawn 3.8 km 2.4 mi tram opened in Calcutta between Sealdah and Armenian Ghat street. In 1875, a railway line was opened between Mokama and Darbhanga by the local ruler Lakshmeshwar Singh through Tirhut Railway. On 9 May 1874, a horse-drawn tramway began operation in Bombay between Colaba and Parel. In 1879, the Nizam's Guaranteed State Railway was established which built railway lines across the then Hyderabad State from Kachiguda. In 1877, Ajmer built F1 class metre-gauge steam locomotive no. 734 became the first indigenously built locomotive in India. In 1897, lighting in passenger coaches was introduced with Jodhpur Railway, the first to introduce electric lighting as a standard fixture.

1900–1999

Railway map of India in 1914

The first railway budget was presented in 1924. On 3 February 1925, the first electric train ran between Bombay and Kurla, hauled by a SLM electric locomotive on DC traction. In 1925, the first Electric Multiple Units (EMU) were introduced in Bombay with 1500 V DC units imported from Cammell Laird and Uerdingenwagonfabrik. Chennai suburban railway started operating in 1931 with a single metre-gauge line from Chennai Beach to Tambaram. In the period between 1925 and 1944, the management of the railway companies in the British presidencies and provinces was taken over by the Government.