Indian Railways Industry

The government announced 5,000 km of Metro rail network by 2047 in 100 cities.

Advantage India

Growing
Demand

* India is projected to account for 40% of the total global share of rail activity by 2050.

* In 2024-2025, the goal is to upgrade 40,000 conventional rail bogies to meet the 'Vande Bharat' standards.

* In 2023-24, traffic revenue is estimated to be Rs. 2,64,600 crore (US$ 32.18 billion), comprising 99.8% of the total revenue.

Attractive
Opportunities

* Indian Railways is developing and creating technology in areas such as signaling and telecommunication with 15,000 kms being converted into automatic signaling and 37,000 kms to be fitted with ‘KAVACH’, the domestically developed Train Collision Avoidance System.

Higher
Investments

* FDI inflows in railway-related components stood at US$ 1.40 billion from April 2000-December 2023.

* The government has laid an ambitious target to allocate US$ 1.4 trillion between 2019 and 2023, including investment to the tune of US$ 750 billion on the railway infrastructure by 2030.

Policy
Support

* In Budget 2024-25, capital outlay of Rs. 2.52 lakh crore (US$ 30.3 billion) has been allocated to the Ministry of Railways. to make advancements in railways.

* Government has allowed 100% FDI in the railway sector.

*Indian Railways crafted the National Rail Plan (NRP) for India - 2030 to develop a modern railway system.

Snapshot Showcase Infographics Reports

Last updated: Jul, 2024

Railways Industry Report

May, 2024

Introduction

The Indian railway system is regarded as the foundation and lifeblood of the economy. Indian railways span thousands of kilometres practically covering the entire nation, making it the fourth largest in the world after the US, China, and Russia. The Railways Board, which has a monopoly over the provision of rail services in India, oversees overseeing the whole infrastructure. Due to its low cost and effective operations, railways continue to be the most popular means of transportation for most Indians when travelling long distances.

India's railway network is recognised as one of the largest railway systems in the world under single management. The railway network is also ideal for long-distance travel and movement of bulk commodities, apart from being an energy-efficient and economic mode of conveyance and transport. Indian Railways is the preferred carrier of automobiles in the country.

The government of India has focused on investing in railway infrastructure by making investor-friendly policies. It has moved quickly to enable Foreign Direct Investment (FDI) in railways to improve infrastructure for freight and high-speed trains.

At present, several domestic and foreign companies are also looking to invest in Indian rail projects. Indian railways launched Semi-high-speed self-propelled trains that have ultra-modern features like quick acceleration, a substantial reduction in travel time, a maximum speed of 160 kmph, on-board infotainment and GPS-based passenger information system, automatic sliding doors, retractable footsteps and Zero discharge vacuum bio-toilets, CCTV cameras etc. and other contemporary features as per global standards.

According to Indian Railways 2023 book, Indian railways plan to market semi-high-speed ‘Vande Bharat’ trains by 2025-26 to European, South American, and East Asian markets for exporting 'Made in India' trains.

Market Size

The Indian Railways completed total revenue of Rs. 2.40 lakh crore (US$ 28.75 billion) by the end of FY24.

Total Number of passengers increased by 52 crore to reach 648 crore in FY 2023-24.

In FY24, freight loading crossed by 1500 MT against last year’s loading of 1512 MT in FY23.

In FY24, Indian Railways loaded 1,434.03 MT of freight from April to February, an increase of about 66.51 MT and revenue rose by approximately US$ 778 million (Rs. 6,468 crore) compared to the same period last year. Since August 2020, the Indian Railways has run 450 Kisan Rail services and was able to transport over 1.45 lakh tonnes of agricultural produce & perishables RailTel, a PSU under the Railway Ministry, which provides fast and free Wi-Fi across the stations.

In 2022-23, Railways Indian railways earned 69% of its internal revenue from freight and 24% from passenger traffic.

The remaining 7% was earned from other miscellaneous sources such as parcel service, coaching receipts, and sale of platform tickets. Indian Railways is developing and creating technology in areas such as signalling and telecommunication with 15,000 km being converted into automatic signalling and 37,000 km to be fitted with ‘KAVACH’, the domestically developed Train Collision Avoidance System.

Investments/ Developments

Following are some of the major investments and developments in India’s railways sector:

Prime Minister, Mr. Narendra Modi lays the foundation stone and dedicates to the nation multiple developmental projects worth over Rs. 1.06 lakh crore (US$ 12.8 billion) in Ahmedabad, Gujarat.
Prime Minister, Mr. Narendra Modi, rides the underwater metro and launches Rs. 15,400 crore (US$ 1.8 billion) projects in Kolkata for better connectivity.
In 2024-25, railways’ capital expenditure is targeted at US$ 30.33 billion (Rs. 2.52 lakh crore).
As on January 31, 2024, 41 trains of the Vande Bharat service are running on the Indian Railways, linking states with a Broad Gauge (B.G.) electrified network.
In October 2023, it was reported that, India’s investments in infrastructure will rise to Rs. 143 trillion (US$ 1.71 trillion) between the financial years 2024 and 2030, as per analytics firm CRISIL.
With a view to improve rail connectivity and ease travel for commuters, the Union Cabinet approved seven projects for the Ministry of Railways in August 2023 at a cost of around Rs. 32,500 crore (US$ 3.93 billion). Spanning 35 districts in nine States - Uttar Pradesh, Bihar, Telangana, Andhra Pradesh, Maharashtra, Gujarat, Odisha, Jharkhand, and West Bengal, the projects will add 2,339 km to the existing network.
In June 2023, IRCON (formerly Indian Railways Construction Company Limited) signed a memorandum of understanding (MoU) with the National Investment and Infrastructure Fund Limited and Ayana Renewable Power Limited. This partnership will consider suitable opportunities for solar energy production for the Indian Railways as they intend to increase the share of renewables in their overall energy mix.
In FY23, Northwestern Railway registered the highest growth in freight earnings at Rs. 6,839.93 crore (US$ 832.39 million), which is 30.82% higher than last year’s earnings of Rs. 5,228.13 crore (US$ 636.3 million). Freight loading also increased to 32.69 million tonnes, which is 10.07% higher than last year’s loading of 29.70 million tonnes.
One major development is the launch of the “Vande Bharat Express “, India’s first semi-high speed train. This train, which can reach speeds of up to 160 km/h, has been manufactured indigenously by the Indian Railways’ Integral Coach Factory. It features several modern amenities such as onboard Wi-Fi, GPS-based passenger information system, and CCTV cameras.
The focus on increasing the use of technology to improve safety and efficiency. This includes the use of CCTV cameras in trains and at stations, the implementation of an Automatic Train Protection (ATP) system to prevent collisions, and the use of GPS-based systems for real-time tracking of trains.
Indian Railways is also working on upgrading its infrastructure, with a focus on electrification of lines, the construction of new lines, and the redevelopment of existing stations. The government has also announced plans to invest in high-speed trains, such as the Mumbai-Ahmedabad High-Speed Rail project, which is being implemented with the assistance of Japan.
Revenue growth has been strong over the years. Indian Railways’ revenue reached US$ 5.21 billion in the third quarter of FY23.
The total passenger revenue stood at US$ 8.51 billion during 2022-23.
In FY24 (until July) passenger traffic stood at 8.51 billion.
In FY24 total revenue from traffic is estimated to be Rs. 2,64,600 crore (US$ 32.18 billion), which comprises 99.8% of the total revenue.
Foreign Direct Investment (FDI) inflows in railway-related components stood at US$ 1.40 billion from April -December 2023.
In the case of freight earnings, it experienced a year-on-year growth of 20.84%. It stood at US$ 18.55 billion in FY22 as compared to FY21 which was at US$ 15.35 billion.
Freight remains the key revenue-earning segment for Indian Railways, accounting for 75.2% of the total revenue in FY22, followed by the passenger segment.
Indian Railways aims to achieve 100% electrification of all broad-gauge routes by 2023.
In July 2021, the South-Central Railway zone announced infrastructure development by doubling the maximum permissible speed to 100 km per hour on the Godavari Bridge. The initiative gave a major boost to the Indian Railways on infrastructure modernisation.
Since the launch of first ‘Kisan Rail’ service on August 7, 2020, the Indian Railways have operated a total of 1,040 Kisan Rail services by transporting ~3.38 lakh tonnes of consignment across 72 routes in the country until July 30, 2021.
The Indian Railways is likely to deliver 58 supercritical as well as 68 critical projects worth more than Rs.1,15,000 crore (US$ 15.44 billion) in the next few years. 29 supercritical projects—spanning 1,044 km and costing Rs. 11,588 crore (US$ 1.5 billion)—have been commissioned. Four projects worth Rs. 1,408 crore (US$ 189.05 million) have been completed and the remaining projects are targeted for completion by March 2024.
On July 25, 2021, the Indian Railways Station Development Corporation (IRSDC), a nodal agency of the Ministry of Railways spearheading the re-development of railway stations across the country, claimed that the two railway stations will be redeveloped at an indicative cost of Rs. 1,285 crore (US$ 172.54 million) in four years.
The Indian Railways has decided to undertake electrification of Broad Gauge (BG) rail lines in a mission mode and is likely to complete the process by 2023-24. Indian Railways electrified 58,812 Route Kilometers (RKMs) till March 31, 2023, which is about 90% of the total broad-gauge network (65,300 RKMs) of Indian Railways. About Rs. 21,000 crore (US$ 2.8 billion) is estimated to be spent on electrification of the remaining BG routes.
In January 2021, Hyundai Motor India Ltd. (HMIL) announced that it has exported 125 cars to Nepal via the Indian Railways. The export is claimed to be eco-friendly and the first-ever by the company. With this step, the company is aiming to reduce its carbon footprint by 20,260 tonnes.
The Indian Railways completed eight major capacity enhancement projects by taking advantage of the coronavirus lockdown. These projects included three supercritical projects with a combined length of 68km, three critical projects with a combined length of 45km, upgradation of the entire 389km railway line from Jhajha in Bihar to Pandit Deen Dayal Upadhyaya Junction in Uttar Pradesh and a new 82km port connectivity line to Paradip.
As a part of the Railways’ plans to upgrade its network, the Ministry announced that all non-AC sleeper coaches will be replaced by AC coaches for trains running >130 kmph. This move has been taken as a technical necessity for high-speed trains with the bonus of improving the passenger experience.

Government Initiatives

The Government of India has adopted few initiatives for the Railways sector in the recent past, some of these are as follows:

As of January 2023, a total of 1724 kilometres of Dedicated Freight Corridor (DFC) had been commissioned, with 861 kilometres completed on the Eastern Dedicated Freight Corridor (EDFC) and 863 kilometres on the Western Dedicated Freight Corridor (WDFC).
The Union Cabinet chaired by Prime Minister Mr. Narendra Modi announced about the MoU signed with USAID/India on June 14, 2023, help Indian Railways achieve Net Zero Carbon Emission by 2030.
Indian Railways (IR) is proactively working towards the achievement of Net Zero Carbon Emission by 2030.
As part of its commitment to reduce carbon footprints, Indian Railways is taking several initiatives. In line with this, a Memorandum of Understanding (MoU) was signed between Indian Railways, Government of India and United States Agency for International Development/India (USAID/India) on 14th June, 2023 for collaboration on Renewable energy and Energy Efficiency. The MoU was signed by Shri Naveen Gulati, Member (Traction and Rolling Stock), Railway Board, Indian Railways and Ms. Isabel Coleman, Deputy Administrator, USAID, in the presence of Sh. Anil Kumar Lahoti, Chairman & CEO, Railway Board.
Under the Union Budget 2023-24, capital outlay of Rs. 2.40 lakh crore (US$ 29 billion) has been allocated to the Ministry of Railways, which is the highest ever outlay and about nine times the outlay made in 2013-14.
Under the Union Budget 2023-24, the government allocated US$ 29 billion to the Ministry of Railways.
The Bairabi-Sairang project aims to create an additional 51.38 km of railway track in northeast India.
In the Union Budget 2022-23:
- The government allocated Rs. 140,367.13 crore (US$ 18.40 billion) to the Ministry of Railways.
- Indian Railways will develop new products and efficient logistics services for small farmers, and small and medium enterprises. It will also take steps towards integration of postal and railway networks to provide seamless solutions for movement of parcels.
- 100 PM-GatiShakti Cargo Terminals for multimodal logistics facilities will be developed over next three years.
- Multimodal connectivity between mass urban transport and railway stations will be facilitated on priority.
- 2,000 km of network will be brought under Kavach, the indigenous technology for safety and capacity augmentation.
- ‘One Station-One Product’ concept will be popularized to help local businesses and supply chains.
- The new & upgraded version of Vande Bharat Express between Gandhinagar Capital & Mumbai Central was inaugurated by Prime Minister Mr. Narendra Modi on September 30, 2022.
In August 2022, the government launched Mission Raftaar for speed enhancement and to achieve a target of doubling average speed of freight trains and increasing the average speed of superfast /mail/express trains by 25 kmph
In October 2021, India and Nepal signed a MoU (Memorandum of Understanding), for a proposed US$ 3.15 billion railway line project, to connect Kathmandu and the Indian border town, Raxaul.
Indian Railways has logged the highest ever electrification of sections covering 6,015 Route Kilometer (RKM) in a single year during 2020-21. More than 5 times electrification was achieved during (2014-21) last seven years as compared to during 2007-14.
In April 2021, Indian Railways completed the arch closure of the under-construction Chenab Bridge which is the world’s highest railway bridge. Chenab Bridge is 1315 m long and will be 35 meters higher than Eiffel Tower in Paris. The total cost of the bridge is estimated to be Rs. 1,486 crore (US$ 200.46 million) and the design life of the bridge is said to be 120 years.
To boost rail infrastructure and make the Indian Railways network future ready, Indian Railways has identified 56 projects across the country in various zones to be completed by Feb-Mar 2021 and FY22.
In July 2020, the Ministry of Railways has invited Request for Qualifications (RFQ) for private participation in operating passenger train services across 109 Origin Destination (OD) routes. As part of the plan, the railways will introduce 12 trains in FY23, 45 in FY24, 50 in FY26 and 44 more in the next fiscal, taking the total number of trains to 151 by the FY27. The project would entail private sector investments of about Rs. 30,000 crore (US$ 4.09 billion).
The Government is going to come up with a ‘National Rail Plan’ to enable the country to integrate its rail network with other modes of transport and develop a multi-modal transportation network.
A 'New Online Vendor Registration System' has been launched by Research Designs & Standards Organisation (RDSO), the research arm of Indian Railways, to have digital and transparent systems and procedures.
The Ministry of Railways plans to monetize assets including Eastern and Western Dedicated Freight Corridors after commissioning, induction of 150 modern rakes through PPP, station redevelopment through PPP, railway land parcels, multifunctional complexes (MFC), railway colonies, hill railways and stadiums.

Road Ahead

Indian Railway network is growing at a healthy rate. In the next five years, the Indian railway market is expected to be the third largest, accounting for 10% of the global market. The government has announced two key initiatives for seeking private investments-running passenger trains by private operators across the railways network and redevelopment of railway stations across the country. According to Indian Railways, these projects have the potential of bringing an investment of over US$ 7.5 billion in the next five years.

Introducing 3,000 new trains over the next four to five years to increase the current passenger capacity of the railways from 800 crore to 1,000 crore, with a focus on meeting the needs of the expanding population.

‘Adarsh’ Station Scheme has been started in 2009-10 and presently, railway stations are upgraded/modernised based on identified need of providing better-enhanced passenger amenities at stations. Under the scheme, 1253 stations have been identified for development, out of which 1215 stations so far have been developed.

Indian Railways is also looking at other areas of revenue generation such as the following: a) Change in composition of coaches so that it can push the more profitable AC coach travel; b) Additional revenue streams by monetising traffic on its digital booking IRCTC; and c) Disinvesting IRCTC. The Indian Railway launched the National Rail Plan, Vision 2024, to accelerate implementation of critical projects, such as multitrack congested routes, achieve 100% electrification, upgrade the speed to 160 kmph on Delhi-Howrah and Delhi-Mumbai routes, upgrade the speed to 130 kmph on all other golden quadrilateral-golden diagonal (GQ/GD) routes and eliminate all level crossings on the GQ/GD route, by 2024.

References: Press Releases, Department of Industrial Policy and Promotion, Press Information Bureau, Media Reports, Railways Budget 2022-23/2023-24, Indian Railways