New Delhi, Nov 5 (IANS): Indian Railways will use alternative fuels like bio-diesel in a big way to power its vast fleet of over 4,000 diesel locomotives, Railway Minister D.V. Sadananda Gowda said Wednesday.

Gowda said the railways will start using bio-diesel up to five percent of the total fuel consumption in diesel locomotives.

"This will save precious foreign exchange substantially. Indian Railways consume over two billion litres of diesel a year. For this, railways have to foot a bill of over Rs.15,000 crore annually," Gowda said at the inauguration of a conference organised by Bio-Diesel Association of India (BDAI) here.

"Even a small reduction in fuel consumption through blending with bio-diesel will result in a substantial savings in the fuel bill. In addition, the attendant benefits of a cleaner environment would accrue on account of lower carbon emission, without requiring any change in the locomotive design."