Indian Railways' EXIM container share drops: Report

In a setback to Indian Railways ambition to increase its share in freight market, the share of EXIM container on rail has decreased from around 30% to 28% between 2014 and 2024, owing to strong competition from improving road-based logistics services, said the report.

The report ‘Container train operations after 20 years of deregulation’ prepared by PwC in association with FICCI reflects that enhancing the efficiency and competitiveness of India’s rail-based container logistics offers large opportunities but, at the same time, requires addressing several key challenges.

Prabhas Dansana, Principal Executive Director – Traffic Transportation, Ministry of Railways, called container rail “the future of Indian Railways,” noting that the sector is central to achieving the national target of 40–45% containerised traffic in the upcoming five-year plan.

“EXIM traffic has seen a downfall of 0.59% while domestic is up by 20% in FY24. Steps are being taken like rationalising container rates and allowing bulk container movement at reduced tariffs to encourage adoption and competitiveness,” Dansana said while releasing the report late Friday.

Road dominates the freight market and handles approximately 65% of freight volume, followed by rail with a 26% share. Other modes of transport include coastal shipping, inland waterways and pipelines, which together handle the remaining 9% of the freight volume.

The Indian container train operator (CTO) market was deregulated in 2006 when the railways allowed private rail operators to enter the inland container haulage sector, thereby ending the monopoly of the government-owned Container Corporation of India (CONCOR).

The CTO sector, including CONCOR and other licensed companies, has invested approximately Rs 10,000 crore in procuring approximately 700 rakes to offer EXIM and domestic rail-based container logistics services. The report says that in FY24, the CTOs together earned an annual turnover of approximately Rs 14,000-15,000 crore and railways has invested a cumulative amount of Rs 94,091 crore on dedicated freight corridor.

“Despite these investments, the share of freight movement on rail in containerised form has grown marginally from 4% to 5% between 2014 and 2024,” it noted.

Manish Puri, President, Association of Container Train Operators (ACTO), said that with the CTO licenses set for renewal post the 2006 deregulation, this is the right time to assess sector performance, identify gaps, and implement policy and regulatory interventions. 

He advocated for a level playing field and operational parity for container rail, in line with Model Concession Agreement terms.