Private wagon manufacturers, who significantly expanded production capacity over the past three years in line with the railway ministry’s freight expansion roadmap, are facing uncertainty due to the absence of fresh procurement orders after the completion of the first phase.

Railway ministry officials said the assessment of wagon requirements is an ongoing process and that new orders will be placed based on evolving demand. They also highlighted strong freight performance in FY25, when Indian Railways emerged as the world’s second-largest freight carrier, recording freight loading of 1,617 million tonnes.

Under the National Rail Plan formulated in 2022, the ministry projected a doubling of wagon strength from 300,000 to 600,000 by 2030 to enhance freight capacity and revenues. As part of the plan, the ministry placed an initial major order for 117,229 wagons to be manufactured over three years starting in 2022.

Both private and public sector manufacturers delivered 37,650 wagons each in FY23 and FY24, followed by 41,929 wagons in FY25, marking an all-time high and an 11 per cent year-on-year increase in production. A senior railway official said most manufacturers completed deliveries by the end of 2025, except for a few smaller players that missed timelines.

According to the National Rail Plan, a second procurement order for more than 200,000 wagons, to be manufactured over five years until 2030, was expected to be placed in FY26 with defined annual targets. Officials said manufacturers had scaled up capacity based on the ministry’s ambitious freight expansion strategy and delivered more than 100,000 wagons over three years up to FY25, but are now concerned about the lack of clarity on the next order cycle.

The plan aims to increase railways’ share in freight transportation from 27 per cent to 45 per cent by 2030, which would require a substantial expansion of wagon availability. Projections indicate that the ministry was expected to procure 40,000–46,000 wagons annually between FY26 and FY30 from private and public manufacturers.

Industry experts stressed that enhancing freight capacity is critical for Indian Railways, as freight operations generate the surplus used to cross-subsidise passenger services. Freight accounts for nearly 65 per cent of the railways’ total earnings, with the remaining 35 per cent derived from passenger services, parcels and non-fare revenue.

The Standing Committee on Railways, in its December 2025 report on freight-related earnings and the development of dedicated freight corridors, praised the induction of around 30,000 wagons annually. The committee said greater private sector participation could significantly improve timely wagon availability and urged Indian Railways to promote private investment through clear and measurable targets for private wagon ownership.