NEW DELHI—Indian Railways signed two long-stalled, multibillion-dollar deals for freight locomotives this week, with France’s Alstom SA and , that are part of a broader push by the country to improve infrastructure and drive industrialization.

Under the agreements, Alstom and GE are to build hundreds of locomotives in India in partnership with Indian Railways, giving a boost to Prime Minister Narendra Modi’s efforts to increase domestic manufacturing and help India close a yawning development gap with its East Asian neighbors.

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