Policy Update
Sudeepti Joshi
Background
Rail transport has traditionally been a more cost-efficient mode of freight transportation than road. But in India, it has remained a problem due to the coexistence of freight and passenger services on the same rail routes, and this has constrained the efficiency and capacity of freight movement.
The high utilisation of the major routes, particularly those connecting the country’s major economic centres, has caused congestion, slower freight speeds and limited capacity for further expansion. This problem had a significant impact on the Golden Quadrilateral comprising the Delhi-Mumbai, Mumbai-Chennai, Chennai-Howrah and Howrah-Delhi routes, which occupy only a small fraction of India’s rail network but carry more than 58% of India’s freight traffic (PIB, 2006).
The capacity saturation resulting from this congestion highlighted the need for a dedicated infrastructure that could separate freight operations from passenger services and enable more efficient and timely movement of goods. The Dedicated Freight Corridor (DFC) programme was subsequently developed to address these capacity constraints.
The Dedicated Freight Corridor Corporation of India Limited (DFCCIL) was established on October 30, 2006, under the Companies Act, 1956, as a public sector undertaking under the Ministry of Railways, with an authorised capital of ₹8,000 crore (PIB, 2006).
The initial programme was structured around two major corridors: the Eastern Dedicated Freight Corridor (EDFC) of 1337 km (PIB, 2025), connecting Ludhiana with Sonnagar and subsequently extending towards Dankuni, and the Western Dedicated Freight Corridor (WDFC), connecting Dadri with Jawaharlal Nehru Port (JNPT) over 1,506 km. Together, the original corridors spanned approximately 2,843 km (PIB, 2025).
The Eastern Dedicated Freight Corridor (EDFC) was supported by financing from the World Bank, while the Western Dedicated Freight Corridor (WDFC) received financial assistance from the Japan International Cooperation Agency (JICA), reflecting the scale and strategic importance of the project.
The next phase of India’s freight-corridor programme includes three proposed corridors, the East Coast, East-West and North-South corridors, which were still under examination as of February 2025 (PIB, 2025), while the Dankuni–Surat corridor was announced in the Union Budget 2026–27. The latter is expected to pass through Jharkhand, Bihar, Odisha and Maharashtra (PIB, 2026).
Functioning
DFCCIL (Ministry of Railways) serves as the implementing and operating agency for the DFC network. These corridors mainly run parallel to existing, heavily utilised railway routes. This physical separation allows freight and passenger services to operate independently, reducing competition for track capacity.
The corridors have been designed with technical specifications that allow for higher freight volumes and speeds than conventional railway lines. They provide for a 25-tonne axle load, with the substructure designed to accommodate up to 32.5 tonnes, with a maximum speed of 100 km/h compared with 75 km/h on regular Indian Railways tracks. The target average freight speed is 70 km/h, significantly higher than the existing average of around 26 km/h.
By 2019, implementation had also progressed considerably, with the acquisition of 98.7% of the required land and 97.2% of contracts being awarded (PIB, 2018). The Western Dedicated Freight Corridor marked an important operational milestone in December 2019, when the first double-stack container trial run was conducted on the Rewari–Madar section. Double-stack operations are particularly important for freight logistics, as they allow greater cargo volumes to be moved within a single train movement.
| Date | Route km commissioned |
| 2018-19 | 1,898 km (cumulative track linking) |
| Feb 2025 | 2,741 km |
| 2026 (current) | Both EDFC (1,337 km) & WDFC (1,506 km) commissioned |
Source: Ministry of Railways (PIB, 2025; PIB, 2026)
However, the benefits of a dedicated freight network ultimately depend not only on the corridors themselves but also on how effectively they connect with the wider railway network and freight-generating centres.
Performance
The DFC network is now fully operational, with all 2,843 km of the original corridors commissioned (PIB, 2026). The Eastern Dedicated Freight Corridor was already operational by late 2023, while the remaining section progressed thereafter. This marks a significant transition of the DFC programme from a long-running infrastructure project to an operational freight network.
Utilisation has also increased alongside the expansion of the operational network. The average number of freight trains running on the DFCs rose from 247 per day in 2023–24 to 352 per day in 2024–25 up to February 2025 (PIB, 2025)
Source: PIB, 2025
The original plans envisioned completion of the two corridors during 2015–17, following approvals and institutional arrangements initiated in the mid-2000s.
The pace of implementation reflects how far this timeline slipped even in its early years. As of 2019, 98.7% of the required land had been acquired and 97.2% of contracts had already been awarded, yet physical progress on the ground stood at only 49.6% (PIB, 2019). This gap between preparatory progress and actual construction points to the same execution-stage bottlenecks that the CAG’s subsequent audit would go on to document: delays of up to 32 months in appointing consultants and underutilisation of World Bank funding as contributing factors to the project’s slow progress (CAG, 2021).
Completion accelerated markedly after 2019, with the Eastern corridor being commissioned within roughly four years, though the final stretch of the Western corridor took longer still to complete. In practice, overall completion was achieved only around 2023–24 for the Eastern corridor and later for the Western corridor, placing delivery nearly a decade behind the initial targets.
However, this progress has come after substantial delays. In February 2025 alone, the network handled an average of 371 freight trains per day. The increase indicates that the corridors are being progressively integrated into regular freight operations as more sections become operational.
With the original network now fully operational, the policy question is consequently shifting from building the corridors to maximising their utilisation and economic impact.
Impact
Logistics Costs
– The significance of the DFC network extends beyond the railway sector, particularly in the context of India’s logistics costs.
– There is no official estimate of logistics costs as a share of GDP; estimates cited by the Department for Promotion of Industry and Internal Trade (DPIIT) have ranged from 8% to 14%, highlighting the difficulty of arriving at a uniform measure (PIB, 2023).
– The lack of a definitive figure led the government to constitute a Task Force in March 2023 to develop a more robust framework for measuring logistics costs.
– Until then, the available estimates provide a broad indication rather than a precise measure of India’s logistics costs.
Freight Capacity and Modal Shift
– By increasing the capacity and speed of rail-based freight movement, the DFCs are expected to support a larger role for rail in India’s freight transport system.
– Indian Railways has set a long-term freight loading target of 3,000 million tonnes, with the additional capacity created by the DFC network expected to play an important role in moving towards this objective.
Regional Development
– The potential impact also extends to the regions through which the corridors pass.
– The Eastern DFC traverses parts of Uttar Pradesh and Bihar, where industrial activity has lagged behind several western and southern states.
– Improved freight connectivity can help reduce the logistical disadvantages faced by businesses in these regions and strengthen their links with major consumption and production centres.
– This regional effect is also being supported by the development of multi-modal logistics parks along and around the DFC network.
– By bringing rail, road, warehousing and other logistics services together, these facilities can improve the movement of goods beyond the dedicated corridors themselves.
Environmental Impact
– Indian Railways has introduced a Freight GHG Calculator, which allows customers to compare the emissions and costs of moving goods by rail versus other modes.
– Alongside this, a “Rail Green Points” initiative shows customers the potential carbon savings from choosing rail transport.
– The government aims to raise rail’s freight share from 35-36% to 45% by 2030, with the DFC network central to this goal (PIB, 2026).
Employment and Social Impact
– Official data on the employment and social impact of the DFC network remains limited
– While the corridors have generated construction and operational employment, no consolidated official estimate exists
– Land acquisition has followed the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, though official displacement data has not been published
Emerging Issues
Despite the progress in building the DFC network, its implementation has faced significant execution challenges.
Feeder Route Connectivity
– A CAG audit (2021) of the project highlighted gaps in the development of feeder routes, which are essential for connecting the dedicated corridors with the wider railway network.
– Of the 4,844 route km identified for feeder-route development, only 2,346 km, which is 48%, had been upgraded by November 2020
Financial and Cost Overruns
– The audit pointed out the financial challenges arising from delays and shortcomings in project execution
– It reported ₹285.21 crore in avoidable expenditure related to land acquisition.
– Another ₹16 crore in avoidable commitment charges was associated with underutilisation of World Bank funding.
– Price escalation resulting from delays led to an additional expenditure of ₹2,233.81 crore up to March 2021.
– In one instance, delays in appointing consultants extended to as much as 32 months (CAG, 2022).
Maintenance Infrastructure
– These findings indicate a broader gap between DFC’s infrastructure ambitions and the challenges involved in delivering the supporting systems on time
– The CAG also noted that DFCCIL had not created any maintenance facility at the time of the audit, raising questions about the systems required to sustain the network once operational
Taken together, these issues suggest that the DFC’s performance cannot be assessed solely by the kilometres of track constructed. The effectiveness of the network will also depend on the quality of its feeder connections, financial management, maintenance infrastructure and the ability to address the execution bottlenecks that affected the project during its development.
Way Forward
The next phase of India’s freight-corridor programme provides an opportunity to address these implementation gaps from the outset.
For the new corridors, feeder-route connectivity should be planned and executed alongside the main corridor rather than treated as an option. The 48% completion of feeder-route upgrades recorded during the CAG audit shows the consequences of leaving supporting infrastructure behind.
Similarly, consultant appointments and other important processes should have clear, enforceable timelines, given that delays of up to 32 months in appointing consultants under the earlier project contributed to ₹2,233.81 crore in additional expenditure (CAG, 2021). This could be achieved through pre-approved consultant panels for standard categories of work, so that appointments do not have to be initiated from scratch for each new corridor. Fixed turnaround periods for approvals at each stage of procurement, backed by clear escalation mechanisms when timelines are missed, would also help ensure that delays are identified and addressed early rather than compounding over the course of the project.
Financial management will also require closer monitoring, especially for externally funded projects. Real-time tracking of loan utilisation could help prevent avoidable charges such as the ₹16 crore commitment fee identified in the earlier project (CAG, 2021). Maintenance facilities should also be developed alongside the corridors rather than after operations begin.
These lessons should be formally incorporated into the planning and approval frameworks for the proposed corridors. The Dankuni–Surat corridor, in particular, offers an opportunity to demonstrate whether the execution gaps of the first-generation DFCs have been addressed.
Finally, the findings of the 2023 Logistics Cost Task Force should be made available. A clearer measure of logistics costs would allow the contribution of the DFC network to be assessed against measurable outcomes rather than broad estimates.
Selected References and Important Link
Comptroller and Auditor General of India. (6th April 2022) Report No. 22 of 2021 (Railways) [Press release summary].
Department for Promotion of Industry and Internal Trade. (14 September 2023). Task force on logistics cost estimation: One year of National Logistics Policy [Press release]. Press Information Bureau, Government of India.
https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=1957407®=48&lang=2
Ministry of Finance. (3 February 2026). Union Budget 2026-27: Dankuni–Surat Dedicated Freight Corridor announced [Press release]. Press Information Bureau, Government of India.
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2222767®=3&lang=2
Ministry of Finance. (1 February 2026). Union Budget 2026-27, budget speech. Government of India.
https://static.pib.gov.in/WriteReadData/specificdocs/documents/2026/feb/doc202621775901.pdf
Ministry of Railways. (30 October, 2026). Dedicated Freight Corridor Corporation of India Limited (DFCCIL) incorporated [Press release]. Press Information Bureau, Government of India.
https://www.pib.gov.in/newsite/PrintRelease.aspx?relid=124598
Ministry of Railways. (25 July 2018). Status of land acquisition and contract award for DFC [Press release]. Press Information Bureau, Government of India.
https://www.pib.gov.in/newsite/PrintRelease.aspx?relid=181043®=3&lang=2
Ministry of Railways. (2019). Technical specifications and objectives of the Dedicated Freight Corridor [Press release]. Press Information Bureau, Government of India.
https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=1686785
Ministry of Railways. (27 December 2019). First double-stack container trial run on Western DFC [Press release]. Press Information Bureau, Government of India.
https://www.pib.gov.in/newsite/PrintRelease.aspx?relid=196164®=48&lang=2
Ministry of Railways. (19 March 2025). Progress of Dedicated Freight Corridor [Press release]. Press Information Bureau, Government of India.
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2112843®=48&lang=2
About The Contributor
Sudeepti Joshi is an undergraduate student pursuing a B.A. (Hons) in Economics at Dyal Singh College, University of Delhi. Her interests lie at the intersection of economics, public policy and development.
Acknowledgements
The author extends sincere gratitude to the Madhuritha D, Anushree Khare and IMPRI team for their expert guidance and constructive feedback throughout the process.
Disclaimer
This article is intended for academic purposes only. The views expressed are those of the author and do not necessarily reflect the views of IMPRI or any government.
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