India has the world's third-largest railway network under single management. Indian Railways has 13,452 passenger trains and 9,141 freight trains daily. As of 2017-18, Indian Railways has a total route network of about 68,442 kms and operates more than 22,300 trains daily. A total of 1,106 RKM (Route kilometre) has been electrified across the entire Indian Railways network.
In collaboration with the Government of Japan, a high-speed passenger corridor project between Ahmedabad to Mumbai was undertaken in Railway Budget 2016-17. Construction work has already begun, and the total cost of the project is estimated at Rs 1,01,480 crore (US$ 14.52 billion). The project is estimated to be operational by 2022.
Revenue growth has been strong over the years. Indian Railways’ revenues increased at a CAGR of 6.20 per cent during FY08-19 and reach to US$ 27.13 billion in FY19. The gross revenue stood at Rs 72,532.54 crore (US$ 10.38 billion) in FY20P (up to August 2019).
Freight earnings of Indian Railways have grown at a CAGR of 4.03 per cent to US$ 18.20 billion in FY19 from US$ 11.79 billion in FY08. Freight earnings in FY20 (up to July 2019) stood at Rs 38,178.29 crore (US$ 5.46 billion). Revenues from the passenger segment of Indian Railways have increased at a CAGR of 6.43 per cent to Rs 52,766 crore (US$ 7.55 billion) in FY19 from Rs 26,558 crore (US$ 3.80 billion) in FY08. Passenger earnings of Indian Railways is estimated at Rs 22,384.97 crore (US$ 3.20 billion) in FY20 (up to August 2019). Freight remains the major revenue earning segment for the Railways, accounting for 64.02 per cent of total revenues in FY20 (up to August 2019), followed by the passenger.
During FY19, passenger traffic in the country increased to 8.44 billion and grew at a CAGR of 2.71 per cent during FY07-19. Passenger traffic was valued at 3.48 billion in FY20P (up to August 2019). Freight traffic carried by Indian Railways increased from 744.56 million tonnes in FY07 to 1,221.39 million tonnes in FY19. Freight traffic increased by 2.44 per cent year-on-year to 406.54 million tonnes in FY20 (up to July 2019). Passenger traffic was valued at 18.19 billion in FY20P (up to July 2019) and traffic stood at 2.78 billion.
Under the Union Budget 2019-20, the Government of India allocated Ministry of Railways Rs 94,071 crore (US$ 14.11 billion). FDI Inflows in railway related components from April 2000 to June 2019 stood at US$ 977.24 million.
As per Union Budget 2019-20, government plans to enhance the metro railway initiatives by encouraging more Public Private Partnership (PPP) initiatives and ensuring completion of sanctioned works, while supporting Transit Oriented Development (TOD) to ensure commercial activity around transit hubs. Purchasing Power Parities (PPP) projects investment is estimated to be at Rs. 50 lakh crores (US$ 715 billion) in railways by 2030. The Delhi-Lucknow Tejas Express becomes the first train to be operated by private players. In February 2019, Indian Railways decided to launch food packets with QR codes and give live kitchen feed.
India’s exports of railways have grown at a CAGR of 31.51 per cent during 2010-2018 to US$ 507.90 million. Exports of railways in 2019E stood at US$ 635 million.
With increasing participation expected from private players, both domestic and foreign, due to favourable policy measures, both passenger and freight traffic is expected to grow rapidly over the medium to long term. Government of India’s focus on infrastructure is a major factor which will accelerate growth of railways.