Exports, Tech Upgrades To Drive Indian Freight Wagon Market To Rs 300 Bn By 2031

The freight wagon market in India is expected to nearly double by 2031, touching Rs 250-300 billion from the current Rs 120-140 billion, driven by strong export potential and technological advancements, according to a report by SMIFS, a stock market company. The report highlighted that as of 2025, the market is valued at Rs 120-140 billion, supported by large-scale procurement from Indian Railways (IR) and increasing participation from the private sector.

With a projected compound annual growth rate (CAGR) of 10-12 per cent, the sector is poised to grow significantly over the next six years.

It stated "By 2031, the market is projected to nearly double, reaching Rs 250-300 bn, supported by a strong CAGR of 10-12 per cent, fueled by rising freight demand, technological upgrades, and export potential".

The report mentioned that the government is leading a major transformation in Indian Railways, with the aim of raising its freight share from nearly 27 per cent to around 45 per cent by 2030.

It also targets doubling freight volumes to 3 billion tonnes by the end of the decade. This push is supported by large-scale infrastructure upgrades, including dedicated freight corridors (DFCs), advanced signalling systems, track improvements, and modernization of stations and platforms.

In FY24, Indian Railways added 5,300 km of new tracks, marking a significant improvement in pace from 4 km per day in 2015 to 14.5 km per day at present.

For FY25, it has set a target to lay around 5,500 km of new tracks, with 3,433 km already commissioned between April and December 2024.

Over the next five years, the Railways aims to add a total of 25,000 km of tracks. Alongside expansion, it is also upgrading nearly 23,000 km of existing tracks to support higher speeds of up to 130 km per hour, ensuring both capacity enhancement and modernization.

The report noted that this rapid expansion of the rail network and growing need for freight efficiency will require a sharp rise in wagon capacity. High-capacity, technologically advanced wagons will be essential to transport bulk commodities, reduce turnaround time, and cut logistics costs.

Indian Railways is also focused on modernizing its maintenance infrastructure, replacing outdated wagons, improving material handling systems, and strengthening IT capabilities to ensure operational reliability and faster turnaround times.

With these measures, the freight wagon market is set to play a key role in India's logistics transformation, helping the country meet its ambitious freight targets.

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