In the mid 1950s Indian Railways began introducing diesel locomotives to its metre gauge system.

While the YDM-3 was 13 tons lighter than the YDM-4, Indian Railways opted for the ALCO design because of the heavier axle load and technology agreement that would allow these locomotives to be manufactured in India.

After Banaras Locomotive Works (BLW) completed construction of its factory in Varanasi, production of the class began in India.

All the YDM-4 delivered up to then were presumably based at three premier DLS across India namely Siliguri (SGUJ), Ponmalai Goldenrock (GOC) and Sabarmati (SBI).

The last YDM-4 was based at Rangapara North outbase of Siliguri DLS but later on transferred to Myanmar (Burma) Railways and possibly renumbered as DF1332.