Indian Railways eyes FMCG to diversify freight basket and lift revenues
Indian Railways is fast-paced shopper items (FMCG) as a key commodity of its freight basket quickly and has known as for an trade meet subsequent week to deliberate on alternatives for rail-based transportation.
The transfer comes as a number of reviews have projected a slowing of the expansion of conventional railway freight commodities akin to coal, cement, and metal by FY30. About 65% of Indian Railways’ earnings come from freight motion and are a key income for the general public behemoth.
Indian Railways freight basket stays dominated by conventional commodities, which have contributed to modest general development in railway freight volumes, with a CAGR of solely 5.6% previously 5 years.
To remodel its technique, Railways is organising a spotlight group dialogue on “Growing the Modal Share of Railways in FMCG Freight Site visitors in India” on January 21.
“The session will present a platform for the FMCG trade gamers and Indian Railways to deliberate on alternatives for rail-based transportation, determine challenges associated to coverage, infrastructure, and operations and discover collaborative methods to enhance rail adoption on this phase,” stated a communication to the FMCG trade.
A PwC report launched in July 2025 famous that the commodities with low/negligible rail modal share are projected to develop at a median CAGR of roughly 10%, whereas conventional rail commodities are estimated to develop at a median CAGR of roughly 5%.
This development in low/negligible rail share commodities is primarily pushed by light-weight, high-volume items akin to shopper durables, paper and paper merchandise, prescription drugs, textiles, and FMCG.
Future development
Lately, IR has launched schemes such because the Joint Parcel Product–Railways Cargo Service (JPP RCS) and the Parcel Cargo Specific Prepare (PCET) to advertise this phase. Nonetheless, the modal share for parcel-based cargo by rail stays low, necessitating further interventions for a modal shift from highway to rail.
“One other alternative lies within the vehicle sector, particularly two-wheelers and passenger automobiles, which fall underneath the low rail share class however exhibit robust development forecasts. IR has centered on this phase by modifying the AFTO scheme, introducing trendy rolling inventory and helping the event of recent vehicle loading terminals,” stated the report.
Haulage fees remained unchanged from 2013 to 2023, indicating price stability. These efforts have elevated the modal share of rail in vehicle transport from 1.2% in FY14 to roughly 20% in FY24. Nonetheless, there stays substantial potential for additional growth in modal share given the projected development on this phase.
To fulfill its goal quantity of 3000 million tonnes by 2027 and modal share of 45% by 2030, IR wants to guage and rethink method.
“On this context, diversifying the rail freight portfolio is just not solely a strategic goal however can be important to reinforce rail modal share and general rail freight development. Increasing into high-growth, underrepresented commodity segments is vital for reaching its medium- and long-term goals,” the report added.
