Road to rail: Unlocking India’s freight potential

Across India, freight is beginning to move faster. The Dedicated Freight Corridors (DFCs)—one of the Government of India’s flagship infrastructure programs—are already transforming how goods travel across the country. Containers that once took more than a day and a half to reach Delhi from western India, now arrive in less than half that time.

However, this is not a reality for thousands of industries that depend on logistics solutions to connect with domestic and foreign buyers. Light-engineering parts and textile consignments leave Ludhiana’s industrial estates each day for large consumption centers and seaports. These goods could easily move by rail in containers. Instead, they make the 1,400-kilometer journey by truck, burning fuel and time as they crawl through tolls, queues, and highway bottlenecks. Every hour lost means drivers waiting without rest, and businesses contending with late deliveries—a reminder that logistics inefficiency weighs not only on balance sheets, but also on livelihoods.

This story is echoed nationwide. Nearly 70 percent of freight still moves by truck, while rail’s share has fallen to about 25 percent over the past six decades. The result is also higher logistics costs – a crippling burden for India’s aspirations to become the world’s new manufacturing hub. Reversing this trend has never been more critical for India’s competitiveness and sustainability.

The State of Play 

Indian Railways (IR) has historically focused on nation-building priorities: moving grains for food security, coal for power, and millions of daily passengers. However, most trunk routes on IR’s mixed-use legacy network operate above its design capacity, slowing down freight and impacting the reliability of schedules. But where DFCs are operational, the difference is striking. Freight speeds typically double to 40–60 km/h and  throughput on dedicated freight corridors is dramatically expanded. In 2024-25, DFCs handled some 90 billion net-ton-km* of freight.

DFCs embody transformative innovations in how India builds, operates, and finances infrastructure. Assured transit time for container trains and door-to-door solutions for smaller shippers are either operational or soon to be introduced – key for onboarding quality-sensitive goods to the railways’ freight mix.  These innovations would not have been possible without the additional network capacity introduced by the DFCs.

Truck-on-rail services, which enable trucks to be loaded onto specially designed railway wagons for transport via dedicated freight corridors, also contribute a cleaner and faster integrated transport system. A rise in rail’s modal share from 25 percent today to 40 percent by 2047 could cut annual CO₂ emissions by over 200 million tonnes, save billions in fuel imports, and slash logistics costs that inflate consumer prices and erode export competitiveness. 

The Road-to-Rail Strategy

India stands at a turning point in its logistics evolution. The next leap in competitiveness will not come from building more roads alone—but from rediscovering the power of rail to move the nation’s goods swiftly, sustainably, and at scale. Making this shift will require an all-in approach across three pillars. 

1. Build and finance capacity at scale.

India’s foremost priority is to rapidly expand rail capacity to meet the freight demands of a fast-growing economy. New DFCs would provide much-needed dedicated capacity for moving goods, but feeder routes and signaling upgrades are just as critical. According to the National Rail Plan, by 2051 the country will need roughly 6,000 kilometers of new rail track infrastructure exclusively for freight, at a cost of US$23 billion. Financing cannot rely solely on public budgets: private capital must be mobilized through alternative means. As an example, private freight railroads in the United States have reinvested on their own roughly US$1.4 trillion in capital expenses between 1980 and 2024. In addition, carbon credits from reduced emissions could provide additional revenue streams. 

2. Modernize access points and integrate planning.

India has a shortage of 150–200 modern freight terminals with consolidation, switching, and storage capacity. Converting outdated IR goods sheds into common-user terminals, operated by private partners is the fastest fix. At the same time, it is critical to bring states into the equation through joint ventures that fund last-mile links and to plan industrial clusters around rail access, not just highways.

3. Deliver better services to attract new cargo.

India’s rail system needs to move beyond its legacy bulk cargo portfolio that focuses on coal and cement to bring more types of cargo into the freight rail system. A common-carrier policy that allows private service providers to operate, lease, or own rolling stock, as well as time-assured services, containerization, digitalization, and a [add adjective] freight tariff system are all essential to making rail competitive for manufacturing and retail supply chains.

But these improvements cannot bear fruit without a decisive step to augment the rail system’s capacity.  The choice is clear. More freight on rail means lower costs for businesses, cleaner air for citizens, and greater competitiveness for India in the global economy. Road to rail is not only possible — it is imperative. 

*Net-ton-km (NTKM) is calculated by multiplying the net weight of the cargo (in tons) by the distance it is transported (in kilometers).

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