House Panel urges railways to cut coal dependence, target road-hauled cargo

A parliamentary panel has called on Indian Railways to urgently diversify its freight portfolio beyond coal and other bulk commodities, warning that slowing revenue growth from traditional cargo could constrain future expansion.

In a report tabled in Parliament, the Standing Committee on Railways, chaired by BJP MP C M Ramesh, said Railways must focus on high-growth segments largely dominated by road transport—such as automobiles, FMCG and e-commerce—to strengthen freight earnings and reduce overdependence on coal.

Coal currently accounts for nearly half of Railways’ freight traffic. In 2024–25, Railways carried 1,617 million tonnes (MT) of freight, of which coal alone contributed 823 MT. Other major commodities included iron ore (178 MT), cement (145 MT) and container traffic (89 MT). Together, seven key commodities—coal, pig iron and steel, iron ore, cement, fertilisers, petroleum products and containers—made up over 87 per cent of total freight loading.

The panel noted that year-on-year revenue growth from coal and iron ore has begun to slow, underscoring the need for a broader commodity mix to ensure long-term stability. It recommended that Railways identify cargo categories with low rail share but strong growth potential, study their logistics needs and remove operational constraints that discourage shippers from using rail.

Citing the National Rail Plan, the committee pointed out that India’s total freight demand is projected at over 6,000 MT in 2025, while railways currently handle only about 27 per cent of the total freight movement.

The report also reviewed the performance of the two operational Dedicated Freight Corridors (DFCs), spanning 2,741 km, and stressed the need to attract private investment given their capital-intensive nature. While detailed project reports for three additional corridors—East Coast, East-West and North-South—have been submitted to the Railway Board, private participation remains weak due to high costs, long gestation periods and revenue uncertainties.

The committee cited the failure of the PPP model for the Sonnagar–Dankuni section of the Eastern DFC as an example of limited private sector appetite.

Operationally, the panel flagged a shortage of trained crew as the most pressing challenge for DFCs and urged Railways to address the issue on priority. Despite this constraint, freight trains on DFCs are running significantly faster, averaging 37 km per hour compared to 23.8 km per hour on conventional routes.

The panel concluded that diversifying cargo, improving manpower availability and creating viable investment models are critical for Railways to fully leverage its freight infrastructure and sustain growth.