Indian Railways (IR) operates the world’s fourth largest rail network, spanning nearly 70,000 route kilometres (rkm), after the US, China and Russia. However, the network remains congested, with 51 per cent of routes carrying as much as 96 per cent of total traffic. In recent years, the government has earmarked significant capital expenditure annually for capacity augmentation and network modernisation. In the Union Budget 2026-27, IR has been allocated a record capital outlay of Rs 2.93 trillion, the highest ever for the sector.
Currently, IR operates over 22,000 trains daily, including around 13,000 passenger services and 9,000 freight trains. Freight remains the system’s financial backbone, contributing nearly 65 per cent to total railway revenues in FY 2025. Structural interventions such as the dedicated freight corridors (DFCs) and the Gati Shakti Cargo Terminal [GCT] Policy have played a pivotal role in enabling this growth. For FY 2026, IR has set a freight loading target of 1,702.5 million tonnes (mt). As of November 2025, cumulative freight loading for the year stood at 1,071 mt, generating freight revenue of Rs 1,152.3 billion.
Passenger traffic has also shown sustained expansion. During FY 2026 (till November 2025), IR carried 4,930 million passengers as against 7,350 million passengers carried during FY 2025. Meanwhile, IR’s capital expenditure has grown steadily, with utilisation touching Rs 2,031 billion during FY 2026 (till December 2025), accounting for over 80 per cent of the budgeted allocation.
Key policy initiatives
Over the past year, IR has undertaken several structural and policy initiatives to strengthen governance, accelerate freight-led growth and deepen multimodal integration. The Railways (Amendment) Bill, 2024, passed by the Rajya Sabha in March 2025, seeks to streamline decision-making by granting greater autonomy and operational flexibility to the Railway Board, while decentralising project approvals by empowering zones to sanction works of up to
Rs 10 billion.
Further, IR amended its 2022 land monetisation policy to permit activities such as sorting, grading, packaging and labelling on vacant railway land. Norms for concessional leasing were also eased in the past year, supporting logistics and warehousing development as parcel volumes rose sharply to 44 million in FY 2025, from 31 million in
the previous year.
Most recently, in January 2026, IR introduced the trucks-on-trains service under the DFC framework, reinforcing its push towards a multimodal freight ecosystem. It is also in the process of finalising a revised public-
private partnership (PPP) policy, with around 50 projects, including port connectivity lines and mineral corridors, identified for private
participation.
Further, bidding norms under the GCT policy are being refined to enable higher pre
mium-based bids and improve private investor interest. Under the GCT Policy, 306 terminals have been approved since 2021, with 118 commissioned till October 2025. IR plans to develop 200 additional terminals with an investment of Rs 140 billion.
The government has also identified 434 railway projects spanning over 40,900 km, with a planned investment of Rs 11.16 trillion under three railway economic corridor programmes – energy and mineral corridors, port connectivity corridors and high-traffic-density corridors (Amrit Chaturbhuj) – signalling a decisive shift towards capacity-driven, freight-oriented development.
Expansion through mega programmes
Mega programmes are reshaping India’s rail landscape through targeted capacity creation and modernisation. India’s first high-speed rail project – the Mumbai-Ahmedabad corridor – is targeted for completion by 2029. Spanning 508 km and designed for an operational speed of 320 kmph, the corridor is being developed using Japanese Shinkansen technology. Once operational, it is expected to reduce end-to-end travel time to around two hours, compared to the current six to seven hours. Beyond this corridor, feasibility studies for additional high-speed rail routes are under way,
reflecting a long-term strategy to introduce high-speed connectivity on various corridors.
The DFC programme represents one of the most notable infrastructure interventions undertaken by IR. With a total planned length of over 3,300 km across the eastern and western corridors, the DFCs are designed for freight operations at speeds of up to 100 kmph with 25 tonne axle loads. The eastern corridor (1,337 km) has been fully commissioned, while the western corridor (1,506 km) is partly operational and targeted for completion by March 2026. Once fully functional, the DFCs are expected to handle over 70 per cent of long-haul freight traffic on their respective routes, significantly decongesting passenger lines and reducing transit times by nearly half.
Under the Amrit Bharat Station Scheme, 1,337 stations across the country are being redeveloped into modern, city-centric facilities. As of February 2026, 172 stations have been completed. Key projects slated for completion by 2026 include Howrah, Thane, Ajni, Jaipur, Secunderabad, Gwalior, Ludhiana and Nagpur. The programme aims to transform stations into integrated transport hubs with improved passenger circulation, upgraded amenities and commercial development, strengthening non-fare revenues while
enhancing passenger experience.
Key trends shaping the sector
- Safety, signalling and system modernisation: IR is undertaking large-scale modernisation of safety and signalling infrastructure through technologies such as Kavach 4.0, electronic interlocking, automatic block signalling, integrated traffic management systems and automatic train protection system (ATPS). Kavach has been deployed over 1,306 rkm across five zones, with an ambitious target to cover the entire broad-gauge network by 2030. Installations are planned over 17,000 rkm in FY 2026 and nearly 30,000 rkm during 2026-28.
- Rolling stock and passenger services: Alongside system upgrades, IR is modernising its rolling stock and passenger services to improve safety, comfort and energy efficiency. Conventional ICF coaches are being phased out and replaced with superior Linke Hofmann Busch (LHB) coaches, which offer enhanced crashworthiness and ride quality. Since 2015, IR has replaced over 23,000 ICF coaches, while between 2020 and 2025, it manufactured 29,946 LHB coaches. Locomotive manufacturing has also undergone a structural shift, with IR significantly reducing diesel locomotive production and transitioning to high-horsepower, energy-efficient, Insulated Gate Bipolar Transistor (IGBT)-based three-phase electric locomotives since 2016-17. On the service front, IR has introduced modern train sets and smart coaches, with 164 Vande Bharat trains, 54 Amrit Bharat trains and four Namo Bharat trains operational as of January 2026.
- Freight-led growth strategy: IR aims to increase rail’s modal share in freight movement to 45 per cent by 2030. Key measures include a liberalised automatic freight rebate for traffic loaded in the empty-flow direction, a 10 per cent concession on the movement of empty containers and flat wagons, and lump-sum freight rates for intra-zonal round-trip movements up to 250 km, encouraging short-haul and regional traffic. These are complemented by investments in DFCs, GCTs and multimodal logistics integration to reduce transit time and logistics costs.
- Sustainability and energy transition: IR has set a target to achieve net zero carbon emissions by 2030 and is progressively shifting from diesel to electric traction, while work is under way for deploying
hydrogen-powered trains. Track electrification is nearing completion, with 99.4 per cent of the broad gauge network electrified as of January 31, 2026, covering 69,744 rkm. IR is targeting 100 per cent electrification by March 2026. It currently procures around 10 per cent of its power from renewable sources. As of November 2025, it has commissioned 812 MW of solar and 93 MW of wind capacity, reinforcing its commitment to sustainable rail operations. - Digital transformation: IR has embarked on a comprehensive digital transformation covering network management, train operations, asset maintenance and customer services. Technologies such as IoT, cloud computing, data analytics, machine learning and artificial intelligence (AI) are being deployed for real-time asset monitoring, predictive maintenance, traffic optimisation and enhanced passenger services, improving reliability and decision-making.
- Track upgradation and speed enhancement: As of January 2026, more than 23,000 track km supports speeds above 130 kmph, while nearly 82,000 track km can handle speeds up to 130 kmph. Track renewals remain a priority, with over 7,000 km completed by November 2025 and nearly 10,000 km sanctioned. Looking ahead, IR has planned to achieve 7,900 track km of track renewals during FY 2027. These upgrades are essential for operating modern semi-high-speed train sets and improving ride quality and punctuality.
- Mega engineering projects: IR’s modernisation drive is increasingly being defined by the execution of complex, large-scale engineering projects that enhance network resilience and strategic connectivity. Landmark projects such as the Chenab Bridge, the world’s highest railway arch bridge, exemplify this shift. Part of the Udhampur-Srinagar-Baramulla rail link project, the bridge represents one of the most challenging railway construction feats ever undertaken in India. It is designed to withstand extreme wind speeds, seismic activity and harsh Himalayan weather.
The road ahead
Going forward, IR’s transformation will be driven by capacity augmentation, increased network utilisation, higher speeds, improved punctuality and more predictable operations. IR is also expected to expand asset monetisation and private participation, moving beyond conventional PPP models. Station redevelopment is evolving into transit-oriented development, integrating metro rail, buses and urban mobility while unlocking commercial real
estate value.
On the technology front, the next phase of modernisation will focus on the network-wide deployment of advanced traffic management systems, digital twins and AI-driven condition-based maintenance to improve asset
utilisation and reduce life cycle costs.
Simran Kaur
