India has the fourth-largest railway system in the world, following the US, Russia and China. As of FY21, the Indian Railways had 13,452 passenger trains and 9,141 freight trains. As of FY21, it had a total route network of 68,103 kms. 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. By 2024, Indian railways will be run completely on electricity.

The railways sector has seen some developments, investments and support from the Government in the recent past.

Revenue growth has been strong over the years. Indian Indian Railways’ revenue reached US$ 16.56 billion in FY 2023 (until October 2022)

The total passenger revenue stood at US$ 4.39 billion in FY 2023 (until October 2022)

In FY 2023 (until October 2022) passenger traffic stood at 3.61 billion.

Railway freight traffic growth stood at 115.8 MT MT in September 2022, an increase of 9.15% YoY led by incremental loading of coal, iron ore, cement and clinkers.

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.

FDI inflows in railway-related components stood at US$ 1.23 billion from April 2000-June 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

Freight remains the key revenue earning segment for the Indian Railways, accounting for 75.2% of the total revenue in FY22, followed by the passenger segment.

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.

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.

In November 2021, Indian Railways announced that ~102 semi-high-speed Vande Bharat Expresses are expected to commence operations by 2024, with at least 10 new trains scheduled to launch by August 2022 that will connect 40 cities.

In October 2021, India and Nepal signed an MoU (Memorandum of Understanding), for a proposed US$ 3.15 billion railway line project, to connect Kathmandu and the Indian border town, Raxaul.

In October 2021, Indian Railways announced a plan to establish ~500 multi-modal cargo terminals under the ‘PM GatiShakti’ programme, with an estimated outlay of Rs. 50,000 crore (US$ 6.68 billion) in four-five years. Through this plan, the government plans to integrate various modes of transportation for seamless movement of parcel and bulk cargo (e.g., coal and steel).

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.

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.

The Ministry of Railways plans to monetise 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.

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.

The Indian Railways is likely to deliver 58 super critical as well as 68 critical projects worth more than Rs.1,15,000 crore (US$ 15.44 billion) in the next few years. 27 super critical projects will be completed by December 2021, while two projects will be handed over by March 2022. 29 super critical projects—spanning 1,044 kms 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.

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 of October 2021, Indian Railways completed electrification work of total 649 route kilometers, from Katihar to Guwahati, over the Northeast Frontier Railway, boosting the route’s connectivity.

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.

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. Of the 64,689 kms of broad gauge route, 45,881 kms has been electrified and the remaining 18,808 kms route is yet to be electrified. About Rs. 21,000 crore (US$ 2.8 billion) is estimated to be spent on electrification of the remaining BG routes.

The future outlook of the railways sector looks on track with pandemic easing out.

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.

The future outlook of the railways sector looks on track with pandemic easing out.

Indian Railway network is growing at a healthy rate. In the next five years, Indian railway market is expected to be the third largest in the world, accounting for 10% of the global market.

‘Adarsh’ Station Scheme has been started since 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 1201 stations so far have been developed. The remaining 52 stations are planned to be developed by 2021- 22.