Transforming India’s Transport Sector: Achievements and Future Directions

Every tonne of cement, every sack of grain, and every daily commuter in India moves through a transport network that has been rebuilt almost from scratch since liberalisation. Roads that once ended in dust now connect factories to ports in days instead of weeks, and coastlines that were treated as a backdrop are now being planned as economic corridors in their own right. Two programmes, Bharatmala Pariyojana and the Sagarmala initiative, sit at the centre of this shift, but the bigger story is about how India moves goods and people, and why getting that mix right matters for growth, jobs, and the environment.

From a rail-dominant to a road-dominant economy 🔗

India’s transport story didn’t start with roads. In the 1950s, railways carried the overwhelming share of freight, but that dominance eroded steadily over the following decades. Railways’ share of total freight traffic fell from 89% in 1950-51 to just 30% by 2011-12, and India became a distinctly road-dominant economy from the early 1980s onward. Today, the picture is heavily tilted: roads account for about 70% of freight traffic and more than 85% of passenger traffic, running on a network of over 6.3 million km, the second largest in the world after the United States.

Why did railways lose ground? 🔗

Roads offer something railways structurally can’t: door-to-door delivery without transshipment. As highway investment grew and trucking costs fell, industries like FMCG, automobiles, and containerised cargo gravitated toward road transport, even though it isn’t necessarily cheaper per tonne. This has real consequences. India has set a target of 45% rail share in freight movement by 2030 as part of its climate commitments, but National Rail Plan projections suggest the actual share will only reach around 23% by 2031, well short of the goal. Closing that gap is one of the quieter but more important battles in Indian infrastructure policy right now.

Bharatmala Pariyojana: building the highway backbone 🔗

Approved by the Cabinet Committee on Economic Affairs in October 2017, Bharatmala Pariyojana replaced India’s older, fragmented approach to highway building with something more deliberate. Instead of sanctioning isolated road packages, the programme uses a corridor-based approach that bridges critical infrastructure gaps through economic corridors, inter-corridors, feeder routes, border roads, coastal roads, and greenfield expressways, alongside a network of Multi Modal Logistics Parks meant to consolidate freight for smoother onward movement.

The scale is large: the programme targets roughly 34,800 km of highways at an estimated cost of Rs 5.35 lakh crore. Progress has been steady if not always on schedule. Over 22,590 km of roads had been completed under Bharatmala by 31 March 2026, improving mobility across difficult terrain and strategically important regions. That said, the rollout hasn’t been friction-free. A Comptroller and Auditor General review found that by March 2023, only 76% of the CCEA-approved project length had been awarded, even as the per-km construction cost rose from about Rs 14 crore to Rs 24 crore, largely due to land acquisition delays and funding bottlenecks. It’s a useful reminder that ambitious infrastructure targets and on-ground execution don’t always move at the same pace.

Sagarmala: unlocking India’s coastline 🔗

While Bharatmala focused on roads, Sagarmala took a different route entirely, literally. Launched in March 2015 under the Ministry of Ports, Shipping and Waterways, the programme is built around port-led development, using India’s long coastline and inland waterways as an alternative to overburdened road and rail corridors. The logic is straightforward: moving cargo by sea and river is often cheaper and less carbon-intensive than trucking it across the country.

The five pillars 🔗

Sagarmala’s projects are organised around five broad areas: port modernisation, port connectivity, port-linked industrialisation, coastal community development, and coastal shipping combined with inland water transport. A useful way to think about this, as researchers at the Observer Research Foundation put it, is that Sagarmala’s mandate really breaks down into hinterland connectivity, maritime and coastal connectivity, and digital connectivity, three layers that together aim to make the coastline function as an integrated economic zone rather than a collection of individual ports.

Progress and Sagarmala 2.0 🔗

Coastal shipping traffic has responded well to this push, growing by 118% over the past decade as commodities like coal, cement, and steel increasingly move by sea. The programme’s long-term employment ambitions are equally significant, with an estimated potential of nearly 1 crore jobs, split between roughly 40 lakh direct and 60 lakh indirect opportunities tied to port-led industrialisation. Building on this, the government has introduced Sagarmala 2.0, with an expanded vision tied to India’s ambition of becoming a 30 trillion dollar economy by 2047 and the broader Viksit Bharat mission, backed by fresh budgetary support to unlock further private investment in the maritime sector.

The real cost of moving goods 🔗

For years, India’s logistics costs were widely quoted at 13-14% of GDP, a figure that made Indian exports look expensive relative to global competitors and shaped a lot of policy urgency. It turns out that number was overstated. A more rigorous 2025 assessment using national accounts and GST data found that India’s actual logistics cost stands at 7.97% of GDP for 2023-24, amounting to roughly Rs 24.01 lakh crore. That’s still higher than the National Logistics Policy’s aspiration of single-digit costs comparable to global benchmarks, but it’s a far less alarming starting point than earlier estimates suggested.

Part of the reason costs vary so much across modes is simple physics and infrastructure quality. According to recent analysis, moving a tonne of goods one kilometre costs roughly Rs 2.5-3.0 by road, compared to Rs 1.5-1.8 by rail and barely Rs 1.0-1.2 by waterways. This gap is exactly why multi-modal integration keeps coming up in policy conversations.

Where multi-modal integration comes in 🔗

The government’s answer to this cost gap is the PM Gati Shakti National Master Plan, launched in 2021 to plan road, rail, port, and waterway projects together rather than in silos. On the ground, this shows up as physical infrastructure: Indian Railways has approved 306 Gati Shakti Multi-Modal Cargo Terminals with a combined capacity of 192 million tonnes per annum, of which 118 are already operational, alongside dedicated freight corridors designed to pull bulk cargo off congested highways and onto rail. Bharatmala’s own Multi Modal Logistics Parks and Sagarmala’s port connectivity projects are meant to plug into this same network, so a container can move from a factory to a port using the cheapest combination of road, rail, and water at each leg of the journey, instead of defaulting to a truck for the entire distance.

Fixing the public transport puzzle 🔗

Highways and ports solve the freight problem, but daily commuters face a different set of issues, especially the “last mile” between a metro station or bus stop and someone’s actual destination. The government’s current answer is the PM-eBus Sewa scheme, which plans to deploy 10,000 electric buses across 169 cities under a public-private partnership model, at a total outlay of Rs 57,613 crore, including depot infrastructure, charging networks, and National Common Mobility Card-based ticketing so commuters can move between buses and metro systems on a single card.

The scheme deliberately targets Tier 2 and Tier 3 cities that never had organised bus services in the first place, which matters because urban mobility gaps aren’t limited to the metros everyone talks about. As the World Resources Institute has pointed out, though, the environmental payoff of electric buses is only as clean as the grid that powers them, and India still generates only about 25% of its electricity from non-fossil sources. It’s a reasonable caveat rather than a reason to slow down: electrifying public transport is still a necessary step, it’s just not a complete solution on its own.

Balancing growth with environmental sustainability 🔗

Underneath all of this is a shared theme: growth that’s efficient also tends to be cleaner. Rail and waterways move goods with a smaller carbon footprint than trucks, which is why the push to increase their modal share isn’t just about cost, it’s tied to India’s climate targets too. Dedicated freight corridors alone are estimated to help save over 450 million tonnes of CO2 during their first 30 years of operation by shifting freight away from diesel trucks. Bharatmala and Sagarmala both carry a similar undertone of balanced regional development, connecting border districts, coastal communities, and industrial clusters that were historically left out of India’s growth story, rather than simply adding more capacity to already well-connected corridors.

None of this is finished work. Land acquisition delays, funding gaps, and the sheer difficulty of shifting entrenched habits, like a shipper’s default preference for trucks, mean these programmes will keep evolving well beyond their original deadlines. But the direction is fairly clear: an India that relies less on any single mode of transport, and more on getting the right cargo onto the right mode at the right cost.

What do you think? As Bharatmala and Sagarmala mature, should India prioritise finishing the highway network first, or push harder and faster on shifting freight back toward rail and coastal shipping? And with logistics costs now measured more accurately at under 8% of GDP, does that change how urgently these mega-projects need to be completed?

References

1. https://prsindia.org/policy/analytical-reports/state-indian-railways
2. https://www.britannica.com/topic/transportation-in-India
3. https://www.teriin.org/project/strategies-increase-railways-share-freight-transportation
4. https://static.pib.gov.in/WriteReadData/specificdocs/documents/2023/apr/doc2023428189201.pdf
5. https://swarajyamag.com/infrastructure/indias-biggest-highway-push-over-22500-km-of-roads-completed-under-bharatmala-project
6. https://prsindia.org/policy/report-summaries/implementation-of-phase-1-of-bharatmala-pariyojana
7. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2115878&reg=48&lang=2
8. https://www.orfonline.org/expert-speak/10-years-of-sagarmala-trade-ports-progress
9. https://shipmin.gov.in/en/division/sagarmala
10. https://sagarmala.gov.in/about-sagarmala/introduction
11. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2195125&reg=3&lang=2
12. https://kpmg.com/in/en/blogs/2026/01/logistics-costs-to-gdp-can-budget-2026-finally-move-the-needle.html
13. https://kpmg.com/in/en/blogs/2026/04/rail-versus-roads-rebalancing-indias-freight-mix.html
14. https://pm-ebus-sewa.mohua.gov.in/
15. https://www.wri.org/insights/india-electric-bus-expansion-small-cities
16. https://breakbulk.com/Articles/driving-indias-modal-shift