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Indian Railways plans to run on 100 per cent electricity by 2024 and become a net-zero emission network by 2030.

Indian Railways Industry Analysis

    Last updated on May, 25 2021

India has the fourth-largest railway system in the world, following the US, Russia and China. As of 2019-20, the Indian Railways had 13,169 passenger trains and 8,479 freight trains. As of 2019-20, it had a total route network of 67,956 kms and introduced 153 new passenger train in the same period. A total of 1,106 RKM (Route kilometre) has been electrified across the entire Indian Railways network. By 2024, Indian railways will be run completely on electricity.

Revenue growth has been strong over the years. Indian Railways’ gross revenue stood at US$ 24.78 billion in FY20. RailTel, a PSU under the Railway Ministry, which provides fast and free Wi-Fi across the Indian Railways network, announced its highest ever consolidated income of Rs. 11,660.05 million (US$ 158.48 million) for FY19-20. This income figure is a growth of 12.3% over the consolidated income of the financial year FY18-19.

Freight earnings in FY20 stood at US$ 16.24 billion. Passenger earnings for Indian Railways was estimated at US$ 7.25 billion in FY20. Freight remains the major revenue earning segment for the Railways and accounted for 64% of its total revenue in FY20, followed by the passenger segment. On July 27, 2020, the average speed of freight trains was 46.16 kmph, which is more than double as compared to last year on the same date (22.52 kmph), and total loading stood at 3.13 million tonnes.

In November 2020, Indian Railways freight loading stood at 109.68 million tonnes, compared with 100.96 million tonnes in the same month last year. The Indian Railways earned Rs. 10,657.66 crore (US$ 1.44 billion) from freight loading; this increased by Rs.449.79 crore (US$ 61.13 million) or 4% compared with Rs. 10,207.87 crore (US$ 1.38 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 8.10 billion and is estimated to reach 12 million by 2031. The freight traffic was at 1,208.34 million tonnes in FY20 and is estimated to stand at 2,024 MT by 2024.

The punctuality performance of Indian Railways for mail and express trains increased to 75.67% during April-December 2019 compared to 68.19% during the same period last year.

Under the Union Budget 2021-22, the government allocated Rs. 110,054.64 crore (US$ 15.19 billion) to the Ministry of Railways. FDI Inflow in railway-related components stood at US$ 1.12 billion from April 2000 to September 2020.

Under the Union Budget 2021-22, the government allotted Rs. 1,803.01 crore (US$ 249.07 million) for gauge conversion, Rs. 3,000 crore (US$ 414.43 million) for doubling tracks, Rs. 6,815.36 crore (US$ 941.51 million) for rolling stock and Rs. 2,448.30 crore (US$ 338.22 million) for signalling and telecom.

With increasing participation expected from private players, domestic and foreign, due to favourable policy measures, both passenger and freight traffic is expected to grow rapidly over the medium to long term. The Government of India’s focus on infrastructure is a major factor which will accelerate growth of railways. Railways infrastructure plans to invest Rs 50 lakh crore (US$ 715.41 billion) by 2030.

In FY20, 15 critical projects of around 562 kms track length worth Rs 5,622 crore (US$ 797.56 million) were completed, out of which, 13 were commissioned by railways. Railways completed electrification on a total of 5,782 route kms during the same year.

Indian Railways completed eight major capacity enhancement projects by taking advantage of the coronavirus lockdown. These projects included three super critical 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.

In FY21-22, the Indian Railways announced to complete several projects. The Railway Ministry has identified 56 projects in various railway zones that will be completed in February-March 2021.

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 passenger experience.

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

In January 2021, Hyundai Motor India Ltd. (HMIL) has 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 carbon footprint by 20,260 tonnes.

On November 26, 2020, National High-Speed Rail Corporation Limited (NHSRCL) signed an agreement with L&T to design and construct 47% alignment works for Mumbai-Ahmedabad bullet train project.

In November 2020, Indian Railways’ Rail Coach Factory (RCF), in Kapurthala, rolled out a semi high-speed double-decker coach. Equipped with the modern amenities and design, the coach can run at a top speed of up to 160 km/h.

In February 2021, Indian Railways called for ‘Request for Qualification (RFQ)’ for redeveloping New Delhi railway station under a public-private partnership, with an estimated project cost of Rs. 5,000 crore (US$ 690.75 million).

Railways is leading India’s fight against climate challenge and is taking significant steps towards meeting its ambitious goal of being a net zero carbon emissions organisation by 2030 and meeting India’s Intended Nationally Determined Contributions (INDC) targets.

Indian Railways Industry Report (March, 2021)
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Indian Railways

Freight Traffic Projections on Dedicated Freight Corridor (in MMT)



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