India needs 215 mega freight hubs to transport 45% of goods by rail by 2047: report

India will need about 215 large multimodal logistics parks (MMLPs) by 2047 to support the surge in rail freight movement needed to meet the government’s target of increasing rail’s share of freight transport from the current 27.4% to 45% by 2047, according to a report released by CII and Knight Frank India on Friday.

The report, titled “Fast-Tracking MMLPs to Enable Modal Shift: India’s Multimodal Logistics Transformation”, states that India’s freight movement is projected to more than quadruple to around 28 billion tonnes per year by 2047, requiring a major overhaul of logistics infrastructure and freight aggregation systems.

To achieve the 45% target under the National Railway Plan, Indian Railways would have to handle nearly 12,649 million metric tonnes of freight annually by 2047, the report said. He added that MMLPs – integrated hubs linking rail, road and ports with warehousing and mechanized handling systems – will be essential to the transition from road freight transport.

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Roads dominate

“Currently, India’s freight ecosystem remains heavily dependent on roads, which account for nearly 70% of freight movement per tonne-kilometre, despite rail freight costing nearly half of road freight,” the report said.

She added that India currently has only 30 operational MMLPs handling around 129 million metric tonnes of cargo annually, which is just 2% of the total cargo movement. Another 45 parks are in various stages of development.

The report estimates that if MMLPs were to handle even 30% of India’s rail freight by 2047, they would have to handle around 3,162 MMT of cargo annually. This would require the construction of about 215 next-generation logistics parks with significantly higher throughput than existing facilities.

Integration is very important

The report states that future logistics parks should be designed as high-density freight consolidation hubs integrated with dedicated freight corridors (DFCs), industrial clusters and ports to improve freight aggregation and reduce logistics costs.

Knight Frank India Chairman and CEO Shishir Baijal said India’s logistics transformation is moving into a “scale-driven phase” where the integration of infrastructure networks will become more important than the creation of standalone assets.

“MMLPs can become a critical link between infrastructure creation and freight efficiency by reducing logistics costs, improving rail adoption and supporting India’s long-term manufacturing and export competitiveness,” Baijal said.

The report highlighted that India’s logistics efficiency improved by 59% between FY16 and FY26, citing Knight Frank’s Operational Infrastructure Index, which rose from 0.39 to 0.62 over the period.

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Improvements in transport infrastructure are also estimated to have reduced India’s logistics costs from 13-14% of GDP ten years ago to around 10-10.5% of GDP in FY26, generating annual savings of ₹10.8-11.7 trillion for the economy.

The study reported that combining DFC infrastructure with modern MMLPs could reduce the total cost of door-to-door freight by nearly 43% compared to road-only systems. The dwell time of cargo could also be significantly reduced – from 34 to 152 hours in conventional goods warehouses to 2.5 to 8 hours in mechanized logistics parks.

The report states that Indian Railways’ cargo basket continues to be dominated by bulk commodities, which account for nearly 80% of rail freight traffic. However, future growth is expected to increasingly come from containerized and non-bulk sectors such as manufacturing and consumer goods, which are expected to grow at 8-12% annually.

How to speed up sorting

To speed up the transition to rail, the report recommended stronger central coordination for strategically important logistics parks under Prime Minister Gati Shakti, including faster land acquisition, parallel approvals and timely rail connectivity.

It also suggested using cargo generated by central public sector undertakings such as Coal India, NTPC, Indian Oil, SAIL and FCI as anchor cargo during the initial years of operation of the MMLP to ensure commercial viability.

Another key recommendation was to improve first and last mile connectivity through feeder rail spurs, access roads and integrated planning across rail, road and port agencies. “Without stronger first- and last-mile connectivity, logistics parks risk functioning only as roadside warehouses instead of true multimodal hubs,” the report said.

The report added that the early success of the implementation of projects in Jogighopa, Chennai, Bengaluru, Nagpur and Indore will be critical to building investor confidence in India’s broader multimodal logistics agenda.

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