Muted coal, cement movement drags rail freight growth to 2% in Q1

In rare instance, coal freight earnings dropped in Q1; experts cite import drop

National transporter Indian Railways’ freight volumes increased to 413 million tonnes (mt) in the April-June quarter of 2025-26 (Q1FY26), registering a muted 2 per cent growth over Q1FY25. This was primarily on account of muted growth in major commodities like coal and cement, according to officials in the know.

 

Earnings of the Railways also increased by 2 per cent to ₹44,870 crore in Q1. In June, the national transporter’s revenue from freight decreased marginally, with a nearly flat cargo growth.

 

According to estimates known to sources, coal loading in June increased by 1 per cent to 209 mt while iron ore grew by 5 per cent. Other major commodities like foodgrains and container volumes grew in double digits — 10 per cent and 11 per cent, respectively.

 

On the other hand, some important commodities like cement and fertiliser saw volumes contracting in Q1.

 

In a rare instance, earnings from coal freight decreased by 1 per cent to ₹22,706 crore in Q1, marking a muted period for the commodity, which accounts for nearly half of the Railways’ ₹1.7 trillion freight revenue. 

 

“The correlation between rail freight and gross domestic product (GDP) has historically been a multiple of 0.7x. In that context, a 2 per cent growth is quite muted. This is also partly due to the flat growth in the coal segment, which has a significant weight (around 45 per cent) in the freight basket of the Railways. The dip in coal being carried is due to the fall in coal imports in the last three quarters,” said Jagannarayan Padmanabhan, senior director & global head-consulting, Crisil Intelligence.

 

As regards the supply chain, there is no markable shift in coal loading — rail continued to be the preferred mode of transportation with 47 per cent share, followed by road (33 per cent), merry go round (14 per cent), and belt (6 per cent) for 2024. This has more or less remained the same in percentage terms across the different modes, said Padmanabhan.

 

The Railways had registered a growth of 1.7 per cent in FY25, with experts citing it as a risk to the national transporter’s strategy to have 3,000 mt of freight by 2030. 

 

However, Union Railways Minister Ashwini Vaishnaw has on multiple occasions played the concerns down, saying that certain projects that are in the works — such as the Sonnagar-Dankuni section — will bring a quantum jump in freight volumes at one go once they are completed, and that the freight mission is still on track.