Budget 2025: Industry pins hope for mega wagon orders, focus on freight infra development

With the Union Budget 2025-26 approaching, industry players are pinning hopes on significant announcements for the railway sector, particularly in freight operations and infrastructure development.

The industry also stressed the need to increase the average speed of freight trains to 50 kmph and deploy advanced 12,000 HP electric locomotives.

Texmaxo Managing Director Sudipta Mukherjee expressed optimism for a substantial wagon order, building on the government's 2022 announcement of approximately 1.2 lakh wagon orders over three years.

"Out of the total 3 lakh long-term wagon procurement plan to increase the total number to six lakh wagons, the government had placed nearly 1.2 lakh wagon orders in 2022, which are supposed to be fulfilled by 2025. We hope the government will repeat a similar mega order for wagons in the upcoming budget to push the railways' share in logistics to 45 per cent from the current 26-27 per cent," Mukherjee said.

He also emphasised the need for increased funding for safety, technology, and predictable train running infrastructure.

Vivek Lohia, Managing Director of Jupiter Wagons Limited, called for a multi-pronged approach to strengthen freight operations.

He highlighted the importance of accelerating the expansion of Dedicated Freight Corridors (DFCs), including the proposed 'Central India to Coast via DFC', to enhance the competitiveness of Indian industries.

Stressing the need to increase the average speed of freight trains to 50 kmph, deploy advanced 12,000 HP electric locomotives, and increase freight train length.

He advocated for strategic railway geography assessments for key sectors like mining, NTPC, petrochemicals, cement, steel, FCI, dry ports, fertilizers, and textiles.

Lohia further suggested prioritising capital expenditure on modernising infrastructure, urban rail projects, and innovative strategies such as the real-time information system (RTIS) and the separation of parcel traffic from passenger operations.

He also proposed dedicated Kisan Rails for perishables to support agricultural supply chains.

With the government's focus on sustainability and its net-zero mission, the logistics sector anticipates increased attention on railways and waterways in the upcoming budget. Expectations are rife for a 10-20 per cent boost in the railway budget from the previous allocation.

In the previous budget presented in July 2024, Railways received a record capital expenditure allocation of Rs 2.62 lakh crore. This increase is expected to fund track expansion, the addition of high-speed Vande Bharat trains, and improvements in rail freight.

An expenditure report of Indian Railways until January 5, 2025, pointed at substantial investment in capacity augmentation.