In less than four years since the pioneering eastern section of the Dedicated Freight Corridor (DFC) was commissioned, nearly 15% of railway freight traffic has shifted to its superior infrastructure. The DFC now spans 2,843 km, including the western wing. Prime Minister Narendra Modi inaugurated the final three sections of the western DFC, which had already achieved 85% of potential train capacity before the formal start of full-scale operations.
Freight trains now run at nearly 70 km/hour, 2.5 times the speed of conventional goods trains. Roughly 435 trains use the corridor now, against about 240 in 2024, taking utilisation above 90%. The DFC has enhanced the Railways’ carrying capacity. Double-stack containers and heavier loads have lowered logistics costs, eased highway congestion, and reduced carbon emissions. With only 4% of India’s freight network, the DFC can potentially carry a fifth of its on-land merchandise transport.
Yet the potential gains from specially earmarked tracks for goods transport can be fully realised only when an integrated pan-India freight grid is operational. It should link ports, industrial clusters, logistics parks, and the hinterland, reinforced by the PM Gati Shakti National Master Plan. Higher axle loads, double-stack trains, and electric traction can improve efficiency. But India’s logistics challenge is not merely about cutting transit times and emissions; it is primarily about making supply chains more reliable. New manufacturing facilities should emerge along the grid, reducing costs and strengthening industry’s global competitiveness.
A pan-India freight grid could also help raise manufacturing’s share of GDP. Beyond overall economic productivity, a national freight grid could help the Railways regain cargo lost to road transport and reduce dependence on taxpayer funding for capacity expansion and technological upgrades. The Railways runs an operational deficit and has had to moderate borrowing amid rising debt. Its capital expenditure remained around Rs 2.6 lakh crore between FY24 and FY26. Passenger services are subsidised by about `60,000 crore, despite barely growing volumes. Between FY14 and FY25, nominal GDP almost trebled, but railway passenger revenue barely doubled, while freight receipts grew even slower. Freight loading increased just 3.3% in FY26, following a 1.7% growth in FY25. Public-private partnerships work only in select, peripheral areas and seemingly cannot by themselves repair the transporter’s finances.
This makes a larger freight grid and its profit potential critical. The freight basket must shift towards faster-growing segments such as automobiles, fast-moving consumer goods, and e-commerce. Earnings remain dependent on a narrow commodity base, with coal accounting for nearly half of loading. Targeted discounts could encourage a shift from road to rail where viable. Commodities with low rail modal shares but strong growth potential should be identified, with logistical needs addressed to raise loading and revenues. The Rs 11,000 crore scheme for multi-tracking, artificial intelligence-driven tools, aerial mapping, and modern data-tracking software could streamline logistics and land acquisition.
The government is right to back the 2,100-km East-West freight corridor through an investor-friendly Hybrid Annuity Model, while dividing the project into 10 sections to improve viability. This addresses a major hurdle: uneven risk allocation often makes private investment unviable. A sensible allocation of risks between the government and private developers should make the corridor more bankable, attract private capital, and reduce dependence on overseas development loans. This financing model deserves wider application for proposed North-South and East Coast freight corridors. If executed well, it could provide the Railways with a scalable template for expanding freight capacity without placing the entire burden on public finances.