Indian Railways (IR) has made significant progress in freight transportation during 2024-25. With consistent growth in freight volumes and strategic policy support, IR continues to strengthen its position as a key pillar of India’s transport and logistics infrastructure. In 2024-25, IR achieved record freight loading and revenue milestones, while also laying out a forward-looking vision to enhance its modal share, promote public-private partnerships (PPPs) and modernise its infrastructure.
Freight performance in 2024-25
During 2024-25, IR recorded freight loading of over 1,617 million tonnes (mt), an increase of approximately 2 per cent or 27 mt over the 1,590 mt achieved in 2023-24. This growth translated into a freight revenue of Rs 1.75 trillion, up from Rs 1.68 trillion in the previous fiscal. While the percentage growth may appear modest, the incremental revenue reflects improved efficiency and a gradual shift towards higher revenue-generating freight. Commodity-wise, domestic container traffic saw a remarkable growth of around 20 per cent, indicating a strategic shift towards containerisation, which is not only more efficient but also generates higher revenue compared to bulk commodities. Other key contributors included coal (up 7 per cent), fertilisers (up 1 per cent), and petroleum, oil and lubricants (up 0.6 per cent). The rise in container movement, involving goods such as gunny sacks, hot rolled coils, ceramic tiles, wall care putty and rice, suggests a diversification in freight types, improving overall profitability and operational flexibility.
Policy reforms and PPP push
IR recognises that achieving sustained growth in freight traffic requires the integration of private players into the ecosystem. In April 2025, IR introduced a new PPP policy framework aimed at attracting private investment in infrastructure projects such as port connectivity and mineral corridors. Around 50 projects have been identified under this policy, replacing the previous framework that supported 17 operational projects. The updated model allows private investors to recover their investments via transportation tariffs. IR will benefit from both revenue-sharing mechanisms and fixed incomes from these ventures. The policy also seeks to reduce revenue risks, avoid litigation and promote arbitration for faster dispute resolution. Further, an MoU between the Ministry of Railways and the Ministry of Road Transport and Highways seeks to accelerate the land acquisition process, particularly under the PM Gati Shakti scheme. A fixed timeline for land acquisition has been established to accelerate critical infrastructure projects.
To support policy development, NITI Aayog has invited expressions of interest for a detailed study on container freight pricing, challenges in inland container depots and container freight stations, cargo consolidation strategies, and the viability of less-than-container load shipments. This comprehensive study is expected to provide actionable insights for enhancing rail-based container freight operations. Moreover, states are participating in strengthening the logistics framework. In a notable development, Invest UP (Uttar Pradesh) signed an MoU with Northern Railways’ Lucknow division to enhance logistics and warehousing infrastructure. The agreement allows investors to lease railway land at just 1.5 per cent of the industrial/circle rate for 35 years. Strategies include promoting PPPs, integrating land parcel data with the PM Gati Shakti portal, and mandating one leg of transport via rail to improve multimodal logistics efficiency.
Enhancing freight efficiency with DFCs and GCT terminals
One of the most transformative initiatives for freight movement has been the construction of dedicated freight corridors (DFCs). The western DFC is nearing completion and is expected to be fully operational by December 2025. Dedicated Freight Corridor Corporation of India Limited conducted a successful trial run on the New Umbergaon-IR Saphale section, highlighting operational readiness. DFC routes have significantly increased the average speed of freight trains to about 50 km per hour (kmph), almost double that of conventional routes, and can accommodate long-haul and double-decker trains. In 2024-25 (April-February), an average of 352 trains ran daily on DFC routes, compared to 247 per day in the previous year. In February 2025, the average rose to 371 trains per day.
Under the Gati Shakti cargo terminals (GCT) policy, IR has commissioned a total of 100 terminals to reduce logistics costs and improve multimodal efficiency. Key recent developments include the commissioning of a coal handling yard and GCT terminal in Chausa, Bihar, and the sanctioning of six new terminals across Assam. These efforts aim to decentralise freight movement and support industrial growth in remote regions. In February 2025, IR inaugurated its first exclusive container rail terminal at Unjha, Gujarat, enhancing container logistics infrastructure.
Modernising freight rolling stock
Rolling stock is the backbone of freight movement and IR has made major strides in this area. In May 2025, the government inaugurated the Dahod locomotive manufacturing plant in Gujarat. Built at an investment of Rs 214 billion, the plant manufactures 9,000 horsepower (hp) electric locomotives capable of hauling 4,600 tonnes. The facility has a production capacity of 120 locomotives per year, with scalability to 150 units annually. These locomotives feature regenerative braking, digital tracking, Kavach safety systems and advanced propulsion technologies. In parallel, Alstom delivered its 500th Prima T8 WAG12B electric locomotive to IR from its Madhepura plant in Bihar. With 12,000 hp capacity, the locomotives feature regenerative braking, insulated-gate bipolar transistor (IGBT)-based propulsion and a speed of up to 120 kmph, ideal for hauling heavy loads.
IR also reported the production of 41,929 wagons in 2024-25, marking an 11 per cent increase from 37,650 wagons in 2023-24. This expansion is expected to improve the transport of bulk commodities such as coal, cement and steel.
In a notable innovation, South Western Railway’s Bengaluru division operated India’s first bogie-covered, taller-height auto-car carrier (ACT1) freight train between Penukonda (Andhra Pradesh) and Farukh Nagar (Haryana). This double-decker train, featuring 33 tall wagons, significantly reduces transport costs and marks a shift in auto logistics. The train has an overall capacity to carry about 264 cars, compared to 100 cars on conventional trains. Kia India has already commenced the transportation of sport utility vehicles through this service in March 2025, signalling a positive response from the industry.
Future targets and focus areas
IR already stands as the most sustainable freight transport mode compared to roads, ports and airways. Yet, further decarbonisation is on the horizon. With the goal of achieving 100 per cent electrification by 2025-26, IR is moving swiftly to phase out diesel locomotives. In a groundbreaking initiative, it is planning to establish small nuclear power plants with the support of the Department of Atomic Energy (DAE) and the Ministry of Power (MoP). IR will provide land and guaranteed power consumption, while the DAE and MoP will facilitate plant development and fuel supply. These plants are expected to meet IR’s power demand of 10 GW by 2030.
Shifting private supply chains from road to rail remains a top priority. Notable developments include Shree Cement signing an MoU with RITES Limited in June 2025 to expand its rail network. In April 2025, RITES Limited also partnered with DP World to explore opportunities in logistics and infrastructure, including multimodal parks and virtual trade corridors. Meanwhile, Ambuja Cements and ACC Limited have placed orders for bogie-covered fly ash/cement and bogie brake van wagons, indicating a growing preference for rail logistics. Additionally, in May 2025, Shyam Metalics and Energy Limited announced its plan to set up a greenfield wagon manufacturing facility in Kharagpur, West Bengal. Phase I of the process will produce 2,400 wagons annually, with phase II doubling capacity to 4,800 wagons.
These developments underscore a strong shift towards sustainable and efficient freight transport. Increased electrification, nuclear energy adoption and private sector investment in rail logistics promise reduced carbon emissions, enhanced energy security and decongestion of roads. IR has set ambitious targets for the coming years. By 2030, the goal is to achieve 3,000 mt of freight loading and increase the railways’ modal share of freight traffic from 27 per cent to 45 per cent. For 2025-26, the target freight loading has been set at 1,702 mt, indicating a 5 per cent increase over the current year. IR aims to distribute this growth strategically. Four zones are expected to exceed 200 mt of loading, which includes 275 mt for East Coast Railway, 263 mt for South East Central Railway, 221 mt for East Central Railway and 218 mt for South Eastern Railway. To meet these goals, the sector must rely on targeted policy reforms, enhanced private participation and rapid infrastructure development.
