Dedicated Freight Corridors (DFCs) Driving Economic Growth in India

Context
Dedicated Freight Corridors (DFCs) are a major initiative aimed at reducing logistics expenses, streamlining supply chains, and promoting GDP growth in India. They are set to modernize railway infrastructure and increase revenue.

About DFCs

• Specialized Freight Routes: DFCs are dedicated railway tracks for freight trains, designed to handle double-stack containers and heavy loads, which increases both capacity and speed.
• Key Corridors:
  • Eastern Dedicated Freight Corridor (EDFC): Spanning 1,337 km, it connects Sonnagar in Bihar to Sahnewal in Punjab and primarily transports coal, steel, and agricultural goods.
  • Western Dedicated Freight Corridor (WDFC): Covering 1,506 km from Mumbai to Dadri in Uttar Pradesh, it focuses on goods like textiles, chemicals, and industrial products.
• The foundation for these corridors was laid in 2006, and as of 2024, three sections of the DFCs have been inaugurated.
• Current Status: The EDFC is fully operational, while the WDFC is 93% complete, with full completion expected by December 2025. Around 325 freight trains currently operate on these corridors daily, marking a 60% increase in capacity over previous years.
• Freight Handling: DFCs have managed 232 billion Gross Tonne Kilometres (GTKMs) and 122 billion Net Ton Kilometres (NTKMs), accounting for over 10% of Indian Railways’ total freight traffic.

Significance of DFCs

• Boost to GDP: By reducing logistics costs, DFCs help lower commodity prices by up to 0.5%, thereby improving industrial competitiveness.
• Revenue Growth: Between FY 2018-19 and FY 2022-23, DFCs contributed 2.94% to the growth of Indian Railways’ revenue.
• Export-Import Traffic: WDFC has enhanced port connectivity, reducing transit times, which facilitates trade and stimulates economic growth.
• Job Creation and Investments: The development of DFCs has generated employment and attracted investments, thus boosting the economy.
• Reduced Congestion: The Golden Quadrilateral route, which manages 50% of the nation’s freight on 16% of the track, experiences delays. DFCs ease this congestion by providing an alternative freight route.
• Rail Freight Share: In line with the National Rail Plan, DFCs aim to increase rail freight’s share to 45% by 2030.

Challenges

• Completion Delays: The delay in completing the last segment of the WDFC has postponed its full operationalization to July 2025, delaying benefits.
• Cost Overruns: Project delays have resulted in a cost overrun of Rs 2,690 crore, bringing the total cost to Rs 94,091 crore by March 2024.

Way Forward

• Timely Completion: Speeding up the construction of remaining DFC sections is crucial to fully unlock their benefits and prevent further cost increases.
• Expansion Plans: Future corridors like the East Coast Corridor, East-West Sub-Corridors, and North-South Sub-Corridors are expected to improve connectivity and promote economic integration.
• Sustained Investment: Continued investment in technology and infrastructure will enable DFCs to meet growing freight demands and maintain operational efficiency.