Freight movement in India is dynamic as it leverages diverse transportation modes such as roadways, railways, waterways and airways to meet the country’s growing logistics supply chain demands. Roadways dominate the freight movement with a significant share of 66 per cent, followed by railways with a 30 per cent share, while waterways and airways hold a marginal position in the modal mix pie with 3 per cent and 1 per cent share respectively. Various initiatives are being undertaken by the government to balance this division while improving the quality of logistics operations under each mode.
Roadways
Freight movement in the logistics sector is predominantly dependent on roadways, thereby receiving major attention from the government. The Ministry of Road Transport and Highways is focused on improving road freight operations and has spearheaded initiatives such as the electronic toll collection system to reduce delays and operational costs. The roll-out of satellite-based toll collection and the rise in e-way bill generation are expected to further streamline tolling processes and freight movement. Further, the development of highway infrastructure is instrumental in improving road freight efficiency. To this end, the government has planned an investment of Rs 22 trillion to construct 30,600 km of highways, including expressways, and decongest national highways around cities.
There are several critical concerns that are being addressed as the road network expands. The sector is plagued by a fragmented trucking industry causing inefficiencies and environmental challenges. Heavy-duty trucks, which constitute 76 per cent of the truck fleet, are projected to account for 83 per cent of road freight travel by 2050, further exacerbating pollution levels. With freight demand expected to quadruple by 2050, India faces an urgent need for sustainable solutions to align with its 2070 net-zero target. Companies such as Tata and Ashok Leyland have begun investing in electrification, with Tata’s Ace EV already gaining traction among e-commerce giants such as Amazon and Flipkart. Meanwhile, start-ups like EKA Mobility and Pepper Motion are piloting electric truck projects, signalling the sector’s gradual shift towards green logistics. These initiatives, along with targeted infrastructural impetus, will support the projected long-term growth in road cargo traffic, which is estimated to reach around 3,700 million tonnes (mt) by 2028-29, growing at a compound annual growth rate (CAGR) of 4-5 per cent.
Railways
The Indian logistics sector also relies heavily on railways as it is a cost-effective and energy-efficient option for freight movement. The consistent increase in freight loading, supported by government initiatives like the construction of dedicated freight corridors (DFCs) and the formulation of the Gati Shakti Cargo Terminal Policy, has been pivotal in revitalising rail freight. In fact, the completion of DFCs is expected to increase Indian Railways’ (IR) market share in freight transport to 45 per cent by 2030,
ensuring capacity enhancement, reliability and cost efficiency. Among some of its recent milestones, IR recorded a freight traffic of around 1,600 mt in FY 2024, a 5 per cent growth from FY 2023.
Furthermore, the growth in wagon production and targeted government policies are also stepping stones for rail freight expansion. For instance, wagon production has surged with a CAGR of around 20 per cent, reaching more than 20,000 units in 2023-24. This demonstrates a robust supply chain for rolling stock under the government’s rolling stock production plan. Other plans, such as the National Rail Plan, Mission 3,000 MT and Gati Shakti initiatives, further aim to boost IR’s freight capacity and efficiency. Newly commissioned cargo terminals, such as those in Nardana and Rewari, also highlight efforts to integrate modern facilities into the rail network, facilitate additional freight revenue and optimise operations. Upon tracing this path of developments, it can be observed that rail freight traffic has grown at a CAGR of around 5 per cent between 2017-18 and 2023-24, reaching 1,600 mt in 2023-24. The government aims to increase this up to 3,000 mt by 2030, which necessitates an accelerated CAGR of around 11 per cent.
Waterways
The ports and shipping transportation mode has shown consistent growth in serving India’s logistics sector, driven by enhancements in cargo capacity and reduced turnaround times at ports. The traffic at Indian ports reached around 900 mt during 2024-25 (up to October 2024). Of this, the major ports contribute around 53 per cent of the total traffic, while non-major ports account for 47 per cent, reflecting a balanced distribution. In April-October 2024, Paradip port led the contribution of major ports, experiencing a 5.9 per cent growth in freight traffic, while the Gujarat Maritime Board was at the forefront among the non-major ports, which witnessed a 10.7 per cent increase. In addition, national waterways contributed around 23.56 mt of freight traffic during April-October 2024, which is a 44 per cent increase from the corresponding period of 2023.
This growth is further accelerated by government initiatives like the Sagarmala Innovation and Start-up Policy and the Jal Marg Vikas Project (JMVP). For instance, the Sagarmala programme aims to mobilise Rs 5.5 trillion in infrastructure investments, targeting Rs 350 billlion-Rs 400 billion of annual logistics cost savings. Similarly, the JMVP, with around 62 per cent physical progress as of November 2024, aims to develop inland waterways for efficient cargo movement. Some recent legislative reforms, such as the introduction of the Coastal Shipping Bill, 2024, further liberalise coastal trade by removing licensing requirements for Indian vessels and introducing statutory conditions for foreign ships. Additionally, ongoing projects involving Rs 1.8 trillion at major ports and Rs 2.6 trillion at non-major ports are set to drive a projected 5 per cent CAGR in traffic, reaching more than 1,900 mt by 2028-29.
Airways
Air freight in India plays a crucial role in transporting high-value and time-sensitive goods over long distances. Despite its speed advantage, air cargo faces significant cost barriers compared to road, rail and waterways, which limits its broader adoption. Indian airports handled around 3 mt of freight in 2023-24, utilising just 52 per cent of their cargo handling capacity. This underutilisation highlights the gap between infrastructural capabilities and market demand. However, a positive trend of air cargo traffic was observed in 2024-25, with 15 per cent increase in the April-October 2024 period compared to the same period in 2023-24. This surge is influenced by global geopolitical shifts and the rise of transshipment operations despite a decline in domestic air freight share from 2.5 per cent in 2022-23 to 1.8 per cent in 2024-25.
Further, international operations have also gained momentum, with initiatives like IndiGo CarGo’s freighter services to China and the use of transshipment facilities by Air India. Recent developments, such as the Mangaluru International Airport’s cargo operations to facilitate exports, highlight a focus on leveraging underutilised capacities. Further, the rise in the demand for perishables, e-commerce goods and international trade is expected to sustain air freight’s upward trajectory. Airlines such as IndiGo and Air India play a crucial role in capturing this growth with the support of ongoing infrastructure and policy advancements. Alongside this, the government’s target to achieve 10 mt of air cargo by 2030 stresses the need for transformative growth at a CAGR of around 20 per cent. Related efforts to expand airport cargo handling capacities, like the Bengaluru International Airport’s plan to handle over 1 mt by 2030, are critical steps in this direction.
The way forward
India’s logistics freight movement is set to grow through strategic enhancements in railways, roadways, waterways and airways transportation modes. To support this, IR aims to increase its modal share in freight to 45 per cent by 2030, through the development of DFCs and Gati Shakti cargo terminals, as well as the planned freight via Vande Bharat trains. Similarly, road logistics is set to benefit from rising manufacturing output, improved infrastructure and favourable policies, enabling the industry to meet diverse demands from e-commerce in Tier II and Tier III cities. Meanwhile, the maritime sector, guided by the Maritime India Vision 2030 and Maritime Amrit Kaal Vision 2047, is focused on enhancing port infrastructure, achieving carbon neutrality and supporting intermodal transportation to improve supply chain efficiency. Last but not least, airways logistics, despite its challenges with high costs and low capacity utilisation, is gearing up for expansion, with facility upgrades and the induction of wide-body aircraft for greater cargo handling and long-haul capabilities
