Revolution on Rails: How Indian Railways is Transforming Car Transportation

Revolution on Rails: How Indian Railways is Transforming Car Transportation

 

India's transportation sector is undergoing a radical transformation, and at the heart of this change is the Indian Railways. With a bold vision to modernize logistics, reduce emissions, and enhance operational efficiency, 2025 has brought several major developments—especially in the area of car transportation. From dedicated freight corridors to hydrogen-powered trains and AI surveillance systems, the Indian Railways is positioning itself as a global leader in sustainable and smart transport.

This article explores the latest tech, infrastructure upgrades, and green initiatives that are reshaping car transportation by rail in India.

1. Freight Gets a Supercharged Boost: Dedicated Corridors and Powerhouse Locos

One of the most impactful developments in 2025 is the near-completion of India’s Dedicated Freight Corridors (DFCs). These special rail lines—separate from passenger routes—allow uninterrupted, high-speed movement of goods, including automobiles.

The Western DFC, connecting key industrial hubs, is over 85% complete, while the Eastern DFC is already fully operational. These corridors are designed to handle longer, heavier freight trains at speeds of up to 100–120 km/h, dramatically cutting travel time and increasing reliability.

To complement this infrastructure, Indian Railways has introduced WAG-9D electric locomotives, manufactured in partnership with Siemens at the new Dahod plant in Gujarat. These 9,000 horsepower engines can haul up to 4,500 tonnes of freight at 120 km/h—nearly double the load and speed of traditional locomotives.

2. The Rise of Rail in Automobile Logistics

Perhaps the most impressive shift has been the surge in vehicle transportation by rail. In 2024–25, Maruti Suzuki alone dispatched over 518,000 vehicles by rail—up from just 5,700 in 2014–15. That’s a nearly 90-fold increase in a decade!

This shift is driven by:

Lower logistics costs

Fewer emissions

Specially designed automobile rakes that can now carry SUVs using double-decker configurations

The result? Over 180,000 tonnes of CO₂ saved and 63 million litres of fuel conserved last year. With environmental and operational incentives aligning, Indian Railways is working closely with automakers to further increase rail’s share in car logistics.

3. Green Revolution: Electrification and Hydrogen Trains

Sustainability is a cornerstone of Indian Railways’ future-ready strategy. As of early 2025, the network has completed full electrification of over 23,600 km of tracks—a milestone achieved ahead of schedule.

Electrified routes not only reduce dependency on diesel but also allow the operation of high-efficiency electric trains like the WAG-9D and new EMU (Electric Multiple Unit) models.

In a more experimental but promising direction, Indian Railways has begun hydrogen train trials. A converted DEMU (Diesel Electric Multiple Unit) with a 1,200 kW fuel-cell setup is undergoing field testing. These trains produce zero emissions, emitting only water vapor, and could revolutionize last-mile connectivity on non-electrified routes. The plan includes deploying 35 six-coach hydrogen sets in the coming years.

4. Smart Safety: Kavach and AI-Driven Monitoring

With the expansion of rail freight and increased traffic on key corridors, safety is paramount. Indian Railways is rapidly rolling out Kavach, a cutting-edge Train Collision Avoidance System (TCAS). Already covering over 2,500 km of tracks, Kavach is being expanded by 5,000 km each year.

Key features of Kavach:

Automatic braking if a signal is passed at danger

Real-time data communication between trains

Prevents overspeeding and rear-end collisions

Alongside Kavach, AI-powered CCTV systems are being installed in stations and coaches. A pilot in Mysuru is already live, with plans to extend the system nationwide. Meanwhile, Indian Railways is also using robotic track inspectors, some equipped with elephant detection tech (nicknamed “Gajraj”), to prevent track encroachments and improve maintenance.

5. Infrastructure and Digital Leap

Modernization isn’t limited to locomotives and freight lines. Indian Railways has also focused on digital innovation and passenger amenities:

Amrit Bharat Trains: A new generation of passenger EMUs launched in 2025, featuring USB ports, semi-automatic couplers, real-time monitoring, and upgraded toilets.

Startup Sandbox: A new initiative launched by the Ministry of Railways to collaborate with Indian startups on AI, logistics, safety tech, and energy efficiency.

Multilingual AI Integration: A recent MoU with BHASHINI allows Indian Railways to incorporate real-time AI language translation, enabling passengers and operators across India to access services in their regional languages.

These initiatives not only make the rail system more user-friendly but also create an ecosystem of innovation aligned with the “Digital India” and “Make in India” missions.

6. Manufacturing Powerhouse: The Dahod Facility

One of the key milestones of 2025 is the inauguration of the new locomotive manufacturing hub in Dahod, Gujarat. A cornerstone of India’s public-private partnerships, the facility is set to become a high-tech assembly line for electric and hybrid locomotives like the WAG-9D.

This plant is expected to:

Create thousands of direct and indirect jobs

Boost local manufacturing under the Atmanirbhar Bharat initiative

Enable faster turnaround of rail assets and indigenous innovation

The Road (or Rail) Ahead

The year 2025 is shaping up to be a turning point for Indian Railways. What was once a legacy transport network is fast transforming into a smart, sustainable, and high-capacity logistics powerhouse.

With electrification, hydrogen experimentation, AI safety systems, and a deeper integration with the auto industry, Indian Railways is not just moving people and goods—it’s moving India forward.

For automakers, logistics firms, and policymakers, the message is clear: the future of car transportation is on track—literally.

Sources: Indian Railways public releases,

 

How FTWZs can help you outsmart Global Crises

A Free Trade and Warehousing Zone (FTWZ) can be a powerful strategic asset for importers and exporters, especially during global crises like wars, geopolitical tensions, or supply chain disruptions. Here's how FTWZs help in such scenarios:

An FTWZ is a special economic zone that acts as a customs-free logistics hub. Goods can be imported, stored, processed, and re-exported without attracting import duties unless moved to the domestic market.

Benefits of FTWZ During Global Crises

1. Buffer Against Supply Chain Disruptions

Pre-positioning inventory in FTWZs allows businesses to stockpile essential goods close to consumption markets.

This helps mitigate risks due to:

Port closures

Shipping delays

Embargoes or sanction

Example: If shipping lanes are blocked due to war (e.g., Red Sea or Strait of Hormuz), having inventory in FTWZs avoids production shutdowns.---

2. Duty Deferment & Cash Flow Flexibility

Goods stored in FTWZs don't attract import duty until they're moved to the Domestic Tariff Area (DTA).

This frees up working capital and defers costs, which is crucial during financial stress caused by global instability.

3. Diversification of Risk

Companies can diversify their sourcing and distribution through FTWZs.

Goods can be rerouted, consolidated, or re-exported based on changing geopolitical or regulatory landscapes.

Example: If exports to one country are restricted due to war or sanctions, goods in an FTWZ can be re-exported to an alternate market.-

4. Faster Customs Clearance

FTWZs offer streamlined, digitized, and faster customs processes, reducing delays at congested ports during crises.

This improves agility in turbulent times.

5. Repackaging, Labelling, and Light Manufacturing

Importers/exporters can relabel, repackage, or bundle goods in FTWZs to suit specific markets or adjust to emergency demand without paying duties.

6. Ideal for Humanitarian & Critical Supplies

FTWZs allow staging and rapid deployment of medical, food, and emergency goods during crises, avoiding red tape and tariffs.

Example: During the COVID-19 pandemic, FTWZs were used to store and distribute PPE kits, ventilators, and medical Supplies.

7. Insulation from Local Instabilities

Goods in an FTWZ are technically considered outside the national customs territory, giving them legal insulation from sudden policy changes, curfews, or embargoes in the domestic market.

Real-World Use Cases

Middle East Crisis: Indian exporters rerouted goods through UAE-based FTWZs to avoid shipping routes affected by conflict.

Russia-Ukraine War: European and Asian traders used FTWZs in neutral countries (like UAE, Singapore, India) to adjust logistics mid-transit.

US-China Trade War: Businesses warehoused goods in FTWZs to respond flexibly to tariff changes.

FTWZs in India

Prominent FTWZs: DP WORLD FTWZs in Cochin Chennai and Mumbai India 

India has been enhancing FTWZ infrastructure to support trade during volatility

Conclusion:

During global crises, FTWZs act as strategic, neutral, and cost-efficient platforms that enable importers/exporters to stay resilient, compliant, and agile. They help businesses protect supply chains, defer costs, and adapt quickly to volatile global conditions.

Please DM me for customisation and bespoke FYWZ solutions for your requirements.

---

🧾 How to Calculate Export Pricing: EXW, DDP, FOB, CFR Explained

When selling products internationally, choosing the right Incoterm is crucial — it determines how much of the shipping cost and risk you, as the exporter, are responsible for. To price your goods correctly, you must understand how to calculate your export pricing based on the selected Incoterm.

In this article, we’ll cover how to calculate export pricing for the following Incoterms:

• EXW (Ex Works)
• DDP (Delivered Duty Paid)
• FOB (Free On Board)
• CFR (Cost and Freight)

---

1. 📦 EXW – Ex Works

Definition: The buyer takes responsibility for all costs and risks once goods leave the seller’s premises.

Calculation Formula:

EXW Price = Factory Cost + Profit Margin

✅ Includes:

• Raw materials
• Manufacturing costs
• Packaging
• Seller’s profit

🚫 Excludes:

• Inland transport
• Export customs clearance
• Freight or insurance

💡 Example:

• Factory cost: $100
• Profit margin: $20
  👉 EXW Price = $120

---

2. 🚚 DDP – Delivered Duty Paid

Definition: The seller delivers the goods to the buyer's door, paying all costs, including duties and taxes.

Calculation Formula:

DDP Price = EXW + Inland Freight + Export Clearance + Freight + Insurance + Import Duties/Taxes + Local Delivery

✅ Includes everything from the factory to the final destination.

💡 Example:

• EXW: $120
• Inland freight: $20
• Export clearance: $10
• Ocean freight & insurance: $50
• Import duty/tax: $30
• Local delivery: $20
  👉 DDP Price = $250

---

3. ⚓ FOB – Free On Board

Definition: The seller covers all costs until the goods are loaded onto the shipping vessel at the port of origin.

Calculation Formula:

FOB Price = EXW + Inland Transport + Export Clearance + Terminal/Port Handling

✅ Includes:

• Domestic transport to port
• Export paperwork
• Port charges

💡 Example:

• EXW: $120
• Inland transport: $20
• Export clearance: $10
• Port charges: $10
  👉 FOB Price = $160

---

4. 🌊 CFR – Cost and Freight

Definition: The seller pays for the goods and their transport to the destination port — insurance is not included.

Calculation Formula:

CFR Price = FOB + International Freight

✅ Includes:

• All costs up to arrival at the destination port

🚫 Excludes:

• Insurance (CFR ≠ CIF)

💡 Example:

• FOB: $160
• Freight: $40
  👉 CFR Price = $200

---

✅ Quick Summary Table

Incoterm	Seller Pays For	Buyer Pays For
EXW	Factory cost only	Everything else
FOB	Up to loading on ship	Freight, insurance, import duties
CFR	Freight to destination port	Insurance, import duties
DDP	Everything (door-to-door)	Nothing

---

Final Tips for Exporters:

• Always confirm local regulations when quoting DDP prices.
• Work with a freight forwarder to get current rates.
• Provide a cost breakdown to keep pricing transparent for your buyer.

---

Need help setting your export prices or choosing the right Incoterm? Drop your questions in the comments below or get in touch with us!

---