Indian Railways is set to slash freight rates for short-haul cargo (under 300 km) to regain market share from road transport. The initiative, piloted in Gujarat and Maharashtra, aims to make rail freight cost-competitive, especially for sectors like coal, cement, steel, and agro-products. Historically, rail freight has been nearly double the cost of trucking.

Alongside rate cuts, the plan includes major infrastructure upgrades, like 100,000 new rail sidings under a PPP model, to address last-mile connectivity. With these reforms, Indian Railways targets increasing its freight modal share from 28% to 35%, supporting both logistics efficiency and sustainability goals by reducing urban congestion and emissions.

The phased rollout depends on pilot feedback and evolving cargo patterns.