Railways liberalises freight policies to boost movement of key commodities

Indian Railways has simplified freight policies for key commodities, introduced new wagon norms and tightened contractor eligibility to improve cargo movement and execution

The Ministry of Railways has announced reforms to promote cargo transportation by rail in major commodities, including fertilisers, foodgrains, fly ash, petroleum and containers, liberalising policies and introducing new wagons.

 

The national transporter, which carries 85 per cent of India's fertilisers, has introduced a new freight structure under which charges have been simplified to a per-tonne-per-kilometre basis with a rationalised tariff structure comprising three variations, Railways Minister Ashwini Vaishnaw said on Tuesday.

 

Earlier, these charges were levied through 50 rate slabs, complicating operations. Vaishnaw announced a similar simplification and containerisation programme for the transportation of foodgrains, pulses and flour as well.

 

Moreover, the Railways also announced a new policy for the transportation of petroleum products. “Oil companies will now be able to procure specialised wagons directly or lease them through leasing agencies and induct them into the Indian Railways network for specialised requirements,” Vaishnaw said.

 

India generates around 340 million tonnes of fly ash annually, of which nearly 96 million tonnes is utilised by the cement industry. Indian Railways transported about 13 million tonnes of fly ash during 2025-26, accounting for nearly 4 per cent of the country's total fly ash generation.

 

The Railways has been eyeing fly ash transportation for a while now, especially considering the pollution caused by road transportation through populated areas.

 

Under the new policy, specially designed ISO-standard containers will be used for transportation, Vaishnaw said. These containers can be loaded directly from the power plant through top-loading arrangements and unloaded using side-discharge or pneumatic systems without generating dust pollution.

 

The ministry has also launched a new wagon design policy, allowing private players to design their own wagons.

 

Moreover, the government has also simplified container train operations, which run under a special scheme for private players. He said that under the existing system, Container Train Operator (CTO) licences were issued under four categories (Category I-IV), with a registration fee of Rs 50 crore for Category I and Rs 10 crore for each of the other categories, along with route-specific restrictions and different registration requirements.

 

“This has now been replaced by a single unified pan-India Container Train Operator licence. Operators will be able to run container trains across the entire Indian Railways network without category-based restrictions. The registration system has also been simplified through a uniform non-refundable registration fee of Rs 25 crore applicable across all routes,” Vaishnaw said.

 

For railway projects, 10 per cent performance security will now be obtained at the commencement of the contract instead of being recovered through deductions from running bills, Vaishnaw said, adding that such deductions allowed non-serious players to remain in the ecosystem.

 

“To discourage litigation-driven contracting practices, stricter eligibility criteria have also been introduced. Contractors having pending litigation exceeding 50 per cent of their net worth will not be eligible to participate in railway tenders,” he added.