Railway Ministry's Wagon Orders in Limbo as Freight Ambitions Clash with Capacity Crunch
Image Source: Internet
New Delhi, India - Private wagon manufacturers, who invested heavily in expanding production capacity in line with the railway ministry's ambitious freight expansion plan, are facing uncertainty as they await fresh procurement orders. Despite Indian Railways' impressive performance, recording 1,617 million tonnes of freight loading in 2024-25, and emerging as the world's second-largest freight-carrying railway, the ministry has yet to place orders for the second phase of the National Rail Plan. The plan, framed in 2022, aims to double wagon strength from 3 lakh to 6 lakh by 2030, boosting freight revenues. As part of this plan, the ministry placed its first major order for 1,17,229 wagons to be manufactured over three years starting in 2022. Both private and public sector manufacturers delivered a record number of wagons, with 41,929 units produced in 2024-25, an 11 per cent year-on-year increase. However, with the first phase completed, manufacturers are anxious about the ministry's intentions for the second order, expected to be placed in 2025-26 with defined annual targets. Industry experts stress that freight capacity enhancement 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 Indian Railways' total earnings. The Standing Committee on Railways, in its report, commended the induction of around 30,000 wagons annually and urged Indian Railways to actively promote private investment by setting clear and measurable targets for private wagon ownership. Railway ministry officials maintain that the assessment of wagon requirements under the plan is a continuous process, and orders will be placed as needed. Nevertheless, the uncertainty surrounding the second order has left manufacturers in a precarious position, waiting for the ministry to indicate its intentions.
