Other BriefingsIndia’s Dedicated Freight Corridor Program: Progress and Prospects
Indian Railways has operationalized over 90 percent of its Dedicated Freight Corridor (DFC), covering a distance of over 2,800 kilometers. Utilizing the advantages of this freight-focused infrastructure, India intends to build more DFCs connecting important sites.
It is anticipated that the widespread use of DFCs will improve rail-freight logistics in India and give rail a competitive advantage over other modes of transportation.
The establishment of Dedicated Freight Corridors, or DFCs, is expected to lower logistics costs through the use of higher axle load trains, Double Stack Container trains (DSC), and enhanced access to the Northern hinterland via Western Ports. Additionally, it is anticipated to stimulate the development of new industrial hubs and Gati Shakti Cargo Terminals.
India’s dedicated freight corridors: Status of the EDFC and WDFC
India’s Ministry of Railways has undertaken the construction of two DFCs, namely the Eastern Dedicated Freight Corridor (EDFC) from Ludhiana to Sonnagar (1337 km) and the Western Dedicated Freight Corridor (WDFC) from Jawaharlal Nehru Port Terminal (JNPT) to Dadri (1506 km). The construction of EDFC has been fully completed, while 1220 km out of 1506 km of WDFC has been completed, accommodating more than 300 trains daily in the country. The total expenditure for making this network operational amounts to INR 1240 billion (approx. US$14.87 billion).
Efforts are currently in progress to extend the operational route coverage of WDFC to beyond 95 percent by the conclusion of April this year. Trains are achieving speeds ranging from 50 to 60 kilometers per hour (kmph), with the potential to reach up to 100 kmph, significantly surpassing the average speeds of goods trains on regular Indian railway tracks, which typically range from 20 to 25 kmph.
However, there are pending inspections and trials along a recently commissioned 138-kilometer section. It is anticipated that by the end of April 2024, the 138-kilometer stretch between Sanand and Makarpura will also get operationalized.
What is the route of the Western Dedicated Freight Corridor?
The Western Dedicated Freight Corridor stretches over 1,506 kilometers, connecting the JNPT port in Mumbai to Dadri, and traversing through the states of Maharashtra, Gujarat, Rajasthan, Haryana, and Uttar Pradesh.
Currently, WDFC operational routes cover 938 kilometers from Dadri to Sanand, 244 kilometers from Makarpura to Gholvad, and 77 kilometers from Gholvad to Vaitarna; the 138-kilometer Sanand-Makarpura segment is on the brink of operationalization.
Work is ongoing along the 110-kilometer stretch between Vaitarna and JNPT port, with completion expected within a year, subsequently enabling the entire WDFC to be operational, currently serving 100 trains.
What is the route of the Eastern Dedicated Freight Corridor?
The entire 1,337-kilometer Eastern Dedicated Freight Corridor is already operational, with routes from Sahnewal to Khurja (401 km), Khurja to Bhaupur (351 km), Bhaupur to DDU (Deen Dayal Upadhyay junction, formerly called Mughalsarai) (402 km), DDU to Sonnagar (137 km), and the Khurja to Dadri section (46 km).
The EDFC network spans across the states of Punjab, Haryana, Uttar Pradesh, Jharkhand, and Bihar, with 200 trains running daily.
Freight corridors in India: Understanding the infrastructure blueprint
|
India’s freight corridors |
Area covered |
|
Eastern Dedicated Freight Corridor |
1873 kms |
|
East-West Dedicated Freight Corridor |
Received Approval |
|
East Coast Dedicated Freight Corridor |
Received Approval |
|
Western Dedicated Freight Corridor |
1,506 kms |
|
North-South Dedicated Freight Corridor |
Announced |
|
Southern Dedicated Freight Corridor (Proposed) |
Proposed Rail corridor |
To ensure on-time completion of the Dedicated Freight Corridor program, India has ensured timely provision of funds and monitored project land acquisition activities through close coordination with state governments directly and in various forums such as the Project Monitoring Group (PMG), among others.
|
Scale of the Dedicated Freight Corridor Project in India |
|
Dedicated freight corridors cover: 2,843 Route kilometers and pass through 7 states of India Mega-railway projects with a total track linkage of: 6,000+ kilometers Challenging land acquisitions of: 11,827 hectares The freight corridor project involved earthwork of: 2,371 lakh cubic metres Major bridges: 543 Minor bridges: 4,643 Road Over Bridges (ROBS): 304 Road Under Bridges (Rubs): 557 Rail Fly Overs (RFOS): 53 Stations along the alignment: 114 |
Data Source: Dedicated Freight Corridor Corporation of India Limited, Annual Report 2022-23
Meanwhile, India’s Railway Minister Ashwini Vaishnaw has also spoken on the feasibility studies for the development of high-speed rail corridors that have been initiated on three Golden Quadrilateral routes: Delhi-Kolkata, Delhi-Mumbai, and Mumbai-Chennai.
In February 2024, Vaishnaw informed the Rajya Sabha, the upper house of the Indian parliament, that the railway has drafted detailed project reports (DPR) for the establishment of high-speed rail corridors on seven routes, which include Delhi-Varanasi, Delhi-Ahmedabad, and Delhi-Chandigarh-Amritsar.
India’s freight logistics infrastructure plan
2024 Railway Budget announcement
Indian Railways has proposed a massive investment of INR 11,000 billion (US$1318.9 billion) across three upcoming economic corridors in a significant development. These corridors, comprising the energy, mineral and cement corridors, the port connectivity corridor, and the high traffic density corridors, are poised to transform freight and cargo transportation in the nation. This extensive plan encompasses 434 smaller projects, covering a distance of over 40,000 km, with an expected completion timeline of six to eight years.
During the presentation of the Interim Budget 2024-2025, Finance Minister Nirmala Sitharaman underscored the strategic significance of these projects under the PM Gati Shakti banner, stressing their role in enhancing multi-modal connectivity in India, optimizing logistics, and reducing costs. The anticipated alleviation of congestion in high-traffic corridors is predicted to have a positive impact on passenger train services, leading to enhanced safety and increased travel speeds for commuters.
Freight corridors are broad-gauge freight corridors under construction in India by the railway authority, Indian Railways. They are high-capacity railway corridors exclusively meant for the transportation of goods and commodities.
India announced the creation of Dedicated Freight Corridors in Parliament while presenting the Railway Budget for 2005-06. In April 2005, the DFC project was discussed at the Japan-India Summit Meeting. It was included in the declaration of co-operation signed between the Prime Ministers of India and Japan for a feasibility study and possible funding of the dedicated rail freight corridors by the Japanese Government. The feasibility study report was submitted to India’s Ministry of Railways in October 2007.
In the meantime, the ministry initiated action to establish a Special Purpose Vehicle for the construction, operation, and maintenance of the DFCs. This led to the establishment of Dedicated Freight Corridor Corporation of India Limited (DFCCIL) to undertake planning & development, mobilization of financial resources, construction, operation & maintenance, and business development of the DFCs. DFCCIL was incorporated as a Schedule A company under the Company’s Act 1956 on October 30, 2006.
In other developments, India is set to witness the implementation of a high-speed rail project, namely the Mumbai-Ahmedabad High-Speed Rail (MAHSR) Project, sanctioned by the government, with technical and financial support provided by the Government of Japan.
|
The Largest Railway Networks in the World |
|||||||
|
Country |
Length (km) |
Electrified length (km) |
% of the total electrified |
Area (km²) per route km |
Population per route km |
Historical peak length (km) |
Nationalized or private |
|
United States |
250,000 |
2,025 |
0.92% |
43.2 |
2,060 |
408,833 |
|
|
China |
140,000 |
100,000 |
50% |
63.8 |
9,570 |
200,000 (in 2024) |
Nationalized |
|
India |
92,952 |
84,140 |
90.52% |
35.37 |
15,290 |
111,000 |
Nationalized |
|
Russia |
85,000 |
54,054 |
51.48% |
162.84 |
1,367 |
150,000 |
Nationalized |
|
Canada |
49,422 |
129 |
0.20% |
214.48 |
674 |
N/A |
|
|
Germany |
Approximately 42,000 |
22,500 |
55.38% |
9.26 |
2,145 |
64,000 |
Nationalized, with private freight and passenger operators. |
|
Argentina |
Approximately 37,000 km |
190 |
0.51% |
77.45 |
1,117 |
47,000 |
Both |
|
Australia |
Approximately 38,500 |
3,393 |
10.23% |
231.91 |
742 |
N/A |
Both |
|
Brazil |
Approximately 29,000 |
9,025 |
30.27% |
299.6 |
7,225 |
N/A |
Both |
|
France |
Approximately 29,500 |
15,687 |
53.59% |
22.78 |
2,374 |
42,500 |
Nationalized |
Gati Shakti policy and India’s freight corridor program
In 2022, the Ministry of Railways (Railway Board) announced the Gati Shakti Multi-Modal Cargo Terminal (GCT) policy via a circular dated December 15, 2021. The step aims to encourage industry investment in the development of additional terminals for handling rail cargo.
DFCCIL, based on the GCT policy, has requested approval for its implementation, mutatis mutandis. The Railway Board, through its referenced letter (2), and the Board of Directors (BOD) of DFCCIL, granted approval for the implementation of the GCT policy across DFCCIL, except for 14 PFT (private freight terminal) locations, which have been authorized under the “RFP for Development of Logistic Parks/Freight Terminals/Parcel Terminals and their connectivity with DFC stations through private investment.”
“This policy is in supersession of existing DFCCIL’s Private Freight Terminal policy, Private Siding Policy and Port Rail Terminal Connectivity Policy. All new as well as underconstruction/under-approval terminals (under earlier DFCCIL’s PFT/Pvt. Siding/Port Rail Connectivity policies) shall be covered under this GCT policy. Existing Siding/Terminals can also migrate to the new GCT policy by submitting request to GGM(OP&BD)/CO, DFCCIL.
The GCT policy of the Ministry of Railways is being adopted on DFCCIL mutatis mutandis w.e.f. 05.05.2022 except 14 PFT locations which have been permitted under “RFP for Development of Logistic Parks/Freight Terminals/ Parcel Terminals and their connectivity with DFC stations through private investment”. All the terms and conditions as brought out in the GCT policy Ministry of Railway dated t5.L2.2O2L and its amendments from time to time will be implemented over DFCCIL.”
India’s railway sector awaits private investors participation
India has made various efforts to attract private participation in its railways infrastructure through different avenues, such as wagon investment schemes, liberalizing container policies, implementing schemes like the Special Freight Train Operator (SFTO), Automobile Freight Train Operator (AFTO), and Special Parcel Train Operator (SPTO) schemes, allowing private freight terminals, and constructing and opening dedicated freight corridors.
In India, 100 percent Foreign Direct Investment (FDI) in railways is allowed under the automatic route for the following:
- Construction, operation and maintenance of suburban corridor projects through PPP high-speed train projects
- Dedicated freight corridors
- Railway electrification
- Signaling systems
- Freight terminals Passenger terminals
- Infrastructure in industrial parks pertaining to railway line/siding including electrified railways lines
and connectivity to main railway line, Mass Rapid Transport Systems (MRTS)
However, the current lack of separation in the regulatory, policy making, and operator roles within the Railway Board means that freight tariff setting is not aligned with market principles, leading to a lack of trust among private stakeholders.
There have been notable recommendations from several committees in the past, including the Rakesh Mohan Committee, Sam Pitroda Committee, and Bibek Debroy Committee, to delink the regulatory role by establishing an attached office or statutory body. Although the country announced the formation of a Rail Tariff Authority in 2014 and a Rail Development Authority in 2017, these entities are yet to be formally set up in India.
Conclusion
The operationalization of India’s long-awaited Dedicated Freight Corridor signifies a big step toward revolutionizing the country’s freight and cargo transportation. With ambitious plans to expand the DFC network and connect strategic locations, India will optimize its rail-freight logistics, fostering greater competitiveness within the transportation sector.
The robust expansion of rail freight infrastructure is necessary for the efficient movement of logistics and supply chains across the length and breadth of India. This is more so as major industrial hubs are inland or not all connected with ports, which dominate logistics routes.
Globally, the distribution of freight transportation across various modes of transportation is influenced by geographical factors, commodity types, legal regulations, vehicle availability, and infrastructure conditions. The DFC is poised to reduce India’s logistical costs, promote environmental sustainability, and stimulate the development of new industrial hubs and cargo terminals.
However, to fully capitalize on these advantages, India must address regulatory hurdles and incentivize greater private sector involvement in the railway industry. By aligning policies with market principles and establishing regulatory frameworks, India can unleash the full potential of its rail network, facilitating sustainable economic growth and efficient freight transportation.
(US$ 1= INR 83.30)
About Us
India Briefing is one of five regional publications under the Asia Briefing brand. It is supported by Dezan Shira & Associates, a pan-Asia, multi-disciplinary professional services firm that assists foreign investors throughout Asia, including through offices in Delhi, Mumbai, and Bengaluru in India. Readers may write to india@dezshira.com for support on doing business in India. For a complimentary subscription to India Briefing’s content products, please click here.
Dezan Shira & Associates also maintains offices or has alliance partners assisting foreign investors in China, Hong Kong SAR, Dubai (UAE), Indonesia, Singapore, Vietnam, Philippines, Malaysia, Thailand, Bangladesh, Italy, Germany, the United States, and Australia.
- Previous Article India’s Investment Appeal Stays Bright: Findings from EIU Report
- Next Article India’s Regulation of Solar PV Modules: Approved List of Models and Manufacturers
