In the fiscal year 2025 (FY25), Indian Railways managed approximately 1,667 million tonnes (MT) of freight. However, the growth in freight movement has significantly slowed, registering just 1.68%, marking the lowest growth rate in the past five years. Currently, railways account for 26% of the national freight transport, whereas road transport dominates with a 65% share.
The stagnation in freight growth can be attributed to several factors:
The Dedicated Freight Corridor (DFC) is designed to create a specialized rail network for quicker and more efficient freight movement. Currently, only portions of the Eastern and Western DFCs are operational. The complete network, spanning 3,800 km, faces delays, particularly around major ports like JNPT, which limits operational efficiency.
Coal, iron ore, and cement remain the primary commodities transported by rail, with coal alone accounting for 732.8 MT. However, the share of these commodities is gradually declining. Notably, both cement and food grains experienced negative growth in FY25, while domestic container traffic increased by 19.7%, indicating a shift towards a more diversified range of goods.
To improve logistics performance, several reforms have been introduced:
Container freight, particularly for EXIM (export-import), saw a slight decline of 0.4% in FY25 due to low activity at major ports such as Mundra and Pipavav. Despite various policy initiatives, only 5% of total freight is currently containerized. Indian Railways is targeting a significant increase in this share.
By the year 2030, Indian Railways aims to boost its freight share from 26% to 45% and escalate originating freight volumes to 3,000 MT annually. Achieving these ambitious targets will necessitate the development of improved pricing strategies, increased private investment, and enhanced port connectivity.
To facilitate the aforementioned goals, several policy suggestions are being evaluated:
In terms of freight cost, India's rail freight charges are among the highest globally. In 2021, the cost per tonne-km was ₹7.86, contrasting sharply with ₹2.8 in Russia, ₹3 in China, and ₹4 in the United States. This disparity primarily arises from cross-subsidization and a lack of focus on lighter cargo.
Relying heavily on coal—over 50% of rail loading—poses long-term risks as global energy sources evolve. Diversifying into containers, EXIM goods, agricultural products, and finished goods will not only stabilize revenues but also enhance the competitiveness of Indian Railways.
Q1. What is the current growth rate of freight movement by Indian Railways?
Answer: In FY25, the growth rate of freight movement by Indian Railways was just 1.68%, the lowest in the last five years.
Q2. What are the main challenges facing Indian Railways in freight growth?
Answer: Challenges include reduced coal dependence, competition from road transport, delays in infrastructure, high rail tariffs, and inadequate port handling capacity.
Q3. What is the goal for Indian Railways freight share by 2030?
Answer: Indian Railways aims to increase its freight share from 26% to 45% and raise originating freight volumes to 3,000 MT annually by 2030.
Q4. Why is containerization important for rail freight?
Answer: Containerization enhances flexibility and competitiveness in rail freight, allowing for a broader range of goods and improving efficiency in logistics.
Q5. How do India's rail freight costs compare globally?
Answer: India's rail freight costs are among the highest worldwide, with a per tonne-km cost of ₹7.86, significantly higher than in Russia, China, and the US.
Kutos : AI Assistant!
