Indian Railways: Sectoral Presentation & Analysis

India has the world's third-largest railway network under single management. As of 2016-17, India’s rail network had a total length of 67,368 km.

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 US$ 14.52 billion. The project is estimated to be operational by 2022.

Revenue growth for Indian Railways has been strong over the years. Indian Railways’ increased at a CAGR of 9.66 per cent during FY07-FY18 to US$ 27.71 billion in FY18. Freight and Passenger earnings are the two largest components of revenues for Indian Railways. In FY18, Indian Railways generated US$15.70 billion in earnings from commodity freight traffic, much higher than passenger earnings of US$7.55 billion. In the last ten years, revenues from the commodity freight and passenger segment have expanded at a CAGR of 9.88 per cent and 3.71 per cent, respectively. Passenger earnings and freight earnings during April 2018 stood at US$ 0.63 billion and US$ 1.39 billion, respectively.

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.