BANGALORE: Competition from private players and forgein counterparts is forcing the Indian Railways and India Post to resort to technology. The two bodies are planning to deploy RFID for tracking the movement of goods as they seek to reduce operational costs and become more competitive, reported Mint.

The adoption of RFID (short for radio frequency identification) systems by the Indian Railways and India Post is expected to boost the technology this year, especially since it come on the heels of pilot projects run by local retail chains.

RFID tracking systems use microchip-enabled tags that transmit high-frequency radio signals, making it more effective and accurate than compared to older systems that use bar-code stickers and readers. Wal-Mart, the world’s largest retailer, has been driving the adoption of RFID by its suppliers.

The railways, it was reported, have already invested Rs2 crore in ‘tagging’ 1,000 wagons. A senior executive at the Centre for Railway Information Systems said on condition of anonymity told Mint that if satisfied, the railway ministry may invest up to Rs250 crore in putting RFID systems on all its wagons. Incidentally, the railways run over 2.16 lakh wagons carrying more than a million tonnes of freight a day.

“About 60,000 sacks of mails move across our centres in the country and there’s no way we can track them manually,” Faizur Rehman, a senior India Post official was quoted. The department plans to kick-start a pilot project later this month for its Speedpost service between Mumbai and Delhi. If successful, India Post may invest close to Rs100 crore on RFID.

The two corporations already have a tracking system in place, but that is more manual in nature; it gives the status of the consignment updated its arrival or departure from the last transit point.

The postal and railways departments are not the only ones looking at the technology. According to the publications sources, the Indian Army too has just finished a pilot that involved 1,000 RFID tags to manage its top-secret documents.

With such big potential customers, 2007, according to experts, will be the year radio-tagging takes off in India. “With Wal-Mart entering India, RFID will definitely gain momentum in the retail segment,” said Dennis Fuchsof German RFID tag- maker Feig Electronic.

The benefits of RFID are palpable. Bangalore’s Madura Garments reduced its inventory time to a fifth of its earlier 300 hours duration. While the technology is becoming more popular, dropping costs have also helped. Radio tags are now available at Rs 35 each.