# **Introduction**

India has had steady economic growth since 2014, reporting 7.6% GDP growth for the 2015/16 fiscal year (Forbes, 2016). Despite a few shocks in 2016‐2017, the projections are for above 7% growth in the medium term. The growth is ascribed largely to an increase in private consumption due to a growing middle class, and significant public investment in the Indian economy (World Bank, 2016a and 2017). The Government of India forecasts economic growth of 7‐10% per annum over the next 20 years. Efficient freight transport is one of the key enablers to sustain these economic growth rates (Müller et al., 2012).

However, in 2015, logistics costs in India were estimated at 14% of GDP (Kumar and Shah, 2016), compared to North America’s 8% and Europe’s 9‐10% in 2015 (Armstrong and Associates Inc., 2017). Total freight traffic is expected to grow at 9.7% per annum to reach over 13 trillion tonne‐kilometers (tonne‐km) in 2031/32 from about 2 trillion tonne‐km in 2011/12. A balanced modal share is critical to supporting national logistics, which will underpin the economy and associated freight volumes. The National Transport Policy Development Committee (2014) estimated that the modal share of rail and road needs to shift from 35:65 in 2016/17 to 50:50 by 2031/32. Under an optimistic scenario where rail and road excel in their respective areas of domain competence, i.e., rail serving the medium and long‐distance (above 300 km) high‐volume traffic, and road transport serving low volume short‐ distance traffic in a complementary role, rail and road shares could reach 52% and 49%, respectively (Planning Commission, 2008 [Chapter‐XI]). Nonetheless, to achieve this scenario the public sector and policy makers would have to make targeted evidence‐based decisions for rail and a burgeoning inland waterway transport (IWT), to play an important role in servicing freight transport demand, reducing transport costs and mitigating the environmental impacts of freight transport (Kallas, 2011; Woodburn and Whiteing, 2012; Sanchez‐Triana et al., 2013).

However, recent analysis cautioned that, without intervention, India’s freight rail market share could decline to 25% in 2020 from 36% in 2009, compared to an almost 50% rail share in China and 40% in the United States, similar continent‐size nations. Under this scenario, waste caused by poor logistics infrastructure will increase from US$45 billion (equivalent to 4.3% of GDP in 2009), to US$140 billion or more than 5% of the GDP in 2020. However, if logistics challenges are addressed in an integrated and coordinated manner, rail share could move towards the 50% targets mentioned above (McKinsey, 2010).

Achieving this modal shift will require four major interventions:

- 1) Building the right network and ensuring freight flows on the right mode, comprising an integrated network of high‐density long‐distance corridors (rail and waterways), medium‐ distance rail and road connectors, and efficient last‐mile links;

- 2) Creating enablers to maximize the efficient use of the network, which includes developing logistics hubs and focusing on skills development;

- 3) Extracting more from existing assets, for example through increasing carrying capacity; and 4) Increasing the investment allocation to rail to more than 50% of total road/rail spending, with large sums spent on building high‐density traffic corridors, connectors and last‐mile links.

Some of the above interventions are already underway. To realize these transformational changes, India’s National Transport Development Policy estimated the average annual transport infrastructure investment to amount to US$114 billion by 2032 (Makwana, 2016). One of the enablers of optimal allocation of these resources is access to consistent, reliable, disaggregated freight‐flow information 2