India Container Rail Sector Needs Major Reform
India’s container rail sector, which was expected to play a vital role in the nation’s logistics network, is still grappling with several obstacles nearly two decades after the introduction of policies that allowed private operators to run container trains. Despite the initial optimism and the potential for growth, the sector is facing regulatory, infrastructural, and operational challenges that continue to hinder its development.
The data paints a concerning picture. In February 2025, Indian Railways handled 7.11 million tonnes of container cargo, but this figure remained stagnant compared to the previous year and witnessed a 12% drop month-on-month. This decline highlights the ongoing struggles within the sector, which have yet to show significant progress. While the government had hoped that private container train operators (CTOs) would inject competition into the market and boost efficiency, the reality has proven far more challenging. Private operators are facing high capital investments, unpredictable pricing mechanisms, and burdensome regulations that make it difficult to thrive in an already cost-heavy environment. The lack of a stable and clear policy framework, coupled with high haulage charges and complex approval processes, has created a stifling business climate. This has made it harder for private operators to attract clients and increase cargo volumes.
One of the major roadblocks for the sector is the lack of guaranteed timelines for container movement. Delays caused by poor maintenance of rakes, unavailability of locomotives, and unreliable terminal services have left the sector struggling to offer dependable services. A significant number of container terminals lack the required infrastructure to handle larger volumes efficiently. Additionally, many terminals remain on a small scale, driving up handling costs for consignors. For private CTOs, especially those outside the state-run Container Corporation of India (CONCOR), there is a constant challenge in attracting traffic. The lack of assurances around transit times and the limited availability of infrastructure has left many companies feeling disillusioned with their investments. Without guaranteed service levels, many potential clients opt for road transport, which is perceived as more reliable despite being costlier.
The need for reform has never been more urgent. Experts suggest that the government must rationalise haulage charges, offer more transparent and predictable pricing, and address the infrastructure gaps that are stalling growth. A clear and supportive policy framework that treats private operators as partners, rather than competitors, is essential for unlocking the full potential of the container rail sector. The industry has long called for better cooperation with the government to ease regulatory burdens and provide stable business conditions. The Railways must also focus on improving infrastructure, especially in terms of ensuring the timely supply of locomotives and developing more modern, scalable container terminals. Only then can India’s container rail sector realise its potential and become a competitive, efficient alternative to road transport.
The current stagnation in the sector is a reminder that meaningful reforms are needed to achieve the objectives set out two decades ago. Without comprehensive changes to policy, infrastructure, and regulations, the promise of a vibrant container rail sector in India will remain unfulfilled, and the country will continue to lose out on a crucial element of efficient logistics.
