ASSOCHAM has said that Indian Railways is undergoing a structural transformation that could position it as the backbone of the country’s logistics ecosystem, even as key capacity and policy gaps remain.
In its latest report, Future Ready Railways for Viksit Bharat, the industry body outlined an ambitious roadmap to scale rail freight capacity to 3,000 million tonnes by 2030 and significantly increase rail’s share in the national freight mix.
“Railways are no longer viewed only as a mode of transport; they are emerging as a strategic backbone of India’s logistics ecosystem,” the report noted, underlining the sector’s expanding role in driving economic growth.
Infrastructure push driving transformation
The report highlights that large-scale infrastructure initiatives such as the Dedicated Freight Corridors and the PM GatiShakti National Master Plan are already improving transit times, boosting capacity, and enhancing service reliability.
Technological upgrades are also playing a central role. The rollout of Kavach, along with AI-based monitoring, predictive maintenance, and smart signalling systems, is helping improve safety and operational efficiency across the network.
Lower logistics costs, greener growth
Despite its cost advantages, railways currently account for a relatively low share of India’s freight movement compared to global benchmarks, with road transport continuing to dominate. Increasing rail’s modal share is seen as critical to reducing overall logistics costs and improving global competitiveness.
The report also emphasises sustainability, noting that higher electrification and a shift from road to rail could significantly reduce carbon emissions, supporting India’s long-term net-zero ambitions.
Persistent bottlenecks remain
However, ASSOCHAM flagged several structural challenges that could slow progress. These include:
Capacity saturation on high-density routes
Shortage of specialised wagons
High turnaround times
Weak last-mile connectivity to industrial hubs
It also pointed to limited private sector participation due to regulatory constraints, pricing challenges, and operational inefficiencies.
Policy reforms to unlock investment
Recent policy measures such as the Railways (Amendment) Act, 2025 and a revamped public-private partnership framework are expected to improve project viability and attract investment. Faster approvals and longer concession periods could further boost investor confidence.
The report calls for a more integrated, market-driven approach to rail logistics, including better multimodal connectivity, pricing reforms, urban freight solutions, and wider adoption of digital platforms.
“The momentum is real. The ambition is right. What lies ahead is the work of translating both into lasting impact,” the report concluded.
