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Siemens has signed a 3 billion euro ($3.25 billion) contract to supply and service freight trains in India, the German engineering company said on Monday, the biggest locomotive deal in its history.

Siemens will deliver 1,200 electric locomotives and provide servicing for 35 years under the agreement, also its biggest ever in India.

The Siemens-designed, 9,000-horsepower trains with a top speed of 120 km (75 miles)/hr will be assembled in India over the next 11 years, with deliveries starting in 24 months.

"These new locomotives can replace between 500,000 to 800,000 trucks over their lifecycle," said Siemens Mobility CEO Michael Peter.

The order was a big step for Siemens in India, Peter told Reuters, saying the company had previously mainly provided components and infrastructure there.

"India is looking for technology, better efficiency, and longer lifespan for its trains," he said in an interview. "In the past India built their own trains, but they want to increase reliability and average speeds."

The deal is the latest bumper contract won by Siemens after it signed a 900 million euro deal for a new metro line in Sydney, Australia in December.

Peter was confident about reaching Siemens's goal of increasing revenue at the mobility business by 6-9% this year, although this contract would mainly appear as orders in 2023. He said profit margins were in line with what he expected for rolling stock, declining to comment further.

He said Siemens was also looking at other train contracts in India, the world's largest rail market with 24 million passengers travelling daily on more than 22,000 trains.

The government in New Delhi wants to increase the rail network' share of freight transport to 40-45% from the current 27%, said Siemens, whose first contact in India - a London to Calcutta telegraph line - dates back to 1867.