Indian Railways is among the world’s largest rail network, and its route length network is spread over 1,23,236 kms, with 13,523 passenger trains and 9,146 freight trains, plying 23 million travellers and 3 million tonnes (MT) of freight daily from 7,349 stations. 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.
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’ revenue increased at a CAGR of 6.20% during FY08-FY19 to US$ 27.13 billion in FY19. Earnings from the passenger business grew at a CAGR of 6.43% during FY07-FY19 to reach US$ 7.55 billion in FY19P. Freight revenue rose at a CAGR of 4.30% during FY08-FY19 to reach US$ 18.20 billion in FY19.
Revenue growth has been strong over the years. Indian Railways’ gross revenue stood at Rs 183,092.74 crore (US$ 26.20 billion) in FY20 (till February 2020). Freight earnings in FY20 (till February 2020) stood at Rs 119,216.11 crore (US$ 17.06 billion). Passenger earnings for Indian Railways was estimated at 51,077.73 crore (US$ 7.31 billion) in FY20 (till February 2020). Freight remains the major revenue earning segment for Railways, accounting for 65.1% of its total revenue in FY20 (till February 2020), followed by the passenger segment.
In October 2020, Indian Railways freight loading stood at 108.16 million tonnes, compared with 93.75 million tonnes in the same month last year. The Indian Railways earned Rs. 10,405.12 crore (US$ 1.40 billion) from freight loading in October; this is higher by Rs. 868.90 crore (US$ 117.41 million) or 9% compared with Rs. 9,536.22 crore (US$ 1.28 billion) in the same month last year. In November 2020, India Railways announced that 40% of dedicated freight corridor (DFC) will be opened for traffic by end-FY21, while the entire 2,800 km route will be completed by June 2022.
Passenger traffic was valued at 7.25 billion and freight traffic at 1,208.34 million tonnes in FY20.
India was among the top 20 exporters of railways globally as of 2017. India’s export of railways has grown at a CAGR of 31.51% during 2010-2018 to US$ 507.90 million. Exports of railways in 2019E stood at US$ 635 million.
Foreign Direct Investment (FDI) Inflow in railway-related components stood at US$ 1.12 billion from April 2000 to June 2020.
Following are some of the major investments and developments in India’s railways sector:
Few recent initiatives taken up by the Government are:
Indian Railway network is growing at a healthy rate. In the next five years, Indian railway market will be the third largest, accounting for 10% of the global market. Indian Railways, which is one of the country's biggest employers, can generate one million jobs, according to Mr Piyush Goyal, Union Minister for Railways and Coal.
Indian Railways is targeting to increase its freight traffic to 3.3 billion tonnes by 2030 from 1.1 billion tonnes in 2017.
Indian Railways plans to achieve 2,024 MT (metric tonne) loading in 2024 from the current 1,200-1,300 MT.
It is projected that freight traffic via the Dedicated Freight Corridors will increase at a CAGR of 5.4% to 182 MT in 2021-22 from 140 MT in 2016-17.
Note: Conversion rate used in November 2020, Rs. 1 = US$ 0.01352
References: Press Releases, Department of Industrial Policy and Promotion, Press information Bureau, Media Reports, Railways Budget 2019-20, Indian Railways
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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