MSME Rail Freight Can Add Rs 87 bn To Indian Railways

29 Jul 2026 CW Team

The report places national logistics costs at Rs 24.01 tn, or seven point ninety seven per cent of gross domestic product, and notes smaller firms incur a higher burden. Rail is cheaper per tonne-kilometre at Rs one point ninety six versus Rs three point seventy eight for road, but first- and last-mile connectivity and terminal handling, inventory carrying and service uncertainty often remove that edge. A Total Logistics Cost and Impact framework is proposed to capture these time related and uncertainty costs.

The report describes a two-tier terminal ecosystem where modern private sidings and private freight terminals serve larger customers while many common-user goods sheds lack connectivity, warehousing and mechanisation. Private terminals form about 37 per cent of identified terminals yet handle nearly 70 per cent of inward and 72 per cent of outward traffic, exposing the access gap for smaller firms. To tackle this the study proposes a Market Aligned Terminal Accessibility model for terminal modernisation, aggregation and digitised services and a Wagon Access and Availability model for demand led wagon planning and private sector maintenance.

The study estimates capturing the 100 mn t opportunity could generate 50 bn net tonne-kilometres (NTKM) annually for Indian Railways and yield Rs 87 bn in freight earnings. It finds a modal shift could cut annual freight emissions by four point five mn t of CO2 equivalent, aiding decarbonisation. Drawing on Japan and China, the report urges integrated logistics hubs, improved first- and last-mile services and better digital freight booking to broaden access for firms.

A joint FICCI and KPMG in India report finds Indian Railways could unlock Rs 87 bn in annual freight earnings by making rail freight more accessible to micro, small and medium enterprises. The study estimates an addressable MSME freight market of 100 million tonnes (mn t) annually and says Indian Railways can realistically capture about 100 mn t in the non-bulk segment. It identifies access to rail logistics infrastructure as the main barrier rather than freight pricing. The report places national logistics costs at Rs 24.01 tn, or seven point ninety seven per cent of gross domestic product, and notes smaller firms incur a higher burden. Rail is cheaper per tonne-kilometre at Rs one point ninety six versus Rs three point seventy eight for road, but first- and last-mile connectivity and terminal handling, inventory carrying and service uncertainty often remove that edge. A Total Logistics Cost and Impact framework is proposed to capture these time related and uncertainty costs. The report describes a two-tier terminal ecosystem where modern private sidings and private freight terminals serve larger customers while many common-user goods sheds lack connectivity, warehousing and mechanisation. Private terminals form about 37 per cent of identified terminals yet handle nearly 70 per cent of inward and 72 per cent of outward traffic, exposing the access gap for smaller firms. To tackle this the study proposes a Market Aligned Terminal Accessibility model for terminal modernisation, aggregation and digitised services and a Wagon Access and Availability model for demand led wagon planning and private sector maintenance. The study estimates capturing the 100 mn t opportunity could generate 50 bn net tonne-kilometres (NTKM) annually for Indian Railways and yield Rs 87 bn in freight earnings. It finds a modal shift could cut annual freight emissions by four point five mn t of CO2 equivalent, aiding decarbonisation. Drawing on Japan and China, the report urges integrated logistics hubs, improved first- and last-mile services and better digital freight booking to broaden access for firms.

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