NEW DELHI — The Goods and Services Tax (GST) Council is set to approve a proposal that would allow freight trains to use metro rail corridors, a move that could reduce logistics costs and ease congestion in the country’s busiest cities. The decision, announced in a draft resolution circulated to council members on 24 September, is expected to be adopted in the council’s meeting on 27 September.
Background on the Proposal
The proposal was tabled by the Ministry of Finance in a memorandum that highlighted the potential for metro rail infrastructure to carry freight alongside passenger services. It cites studies that show freight movement on metro tracks could save up to 15 percent in operating costs and reduce road traffic by diverting heavy goods vehicles from city streets.
GST Council’s Role and Process
The GST Council, the apex body that decides on tax rates and exemptions, meets monthly to review proposals from the central and state governments. The current proposal is a draft amendment to the GST Act that would exempt freight movement on metro corridors from the standard GST rate, subject to a 5 percent surcharge for non‑metro freight operators.
Potential Economic Impact
Industry analysts estimate that the shift could lower freight costs by ₹5–10 per tonne for goods transported between major hubs such as Delhi–Mumbai and Delhi–Bangalore. The move is also expected to improve supply chain reliability, as metro corridors offer a dedicated, weather‑resistant route that is less prone to the delays that plague road transport.
Reactions from Stakeholders
The Confederation of Indian Industry (CII) welcomed the proposal, noting that it would align India’s logistics sector with global best practices. A spokesperson for the CII said the council’s approval would “strengthen the country’s freight infrastructure and support the ‘Make in India’ initiative.”
Opposition from some state transport departments was noted in a letter to the Ministry of Finance, which raised concerns about the capacity of existing metro tracks to handle heavy freight loads without compromising passenger services. The letter also requested a detailed feasibility study before the council’s final decision.
Implementation Timeline
If the council approves the draft, the Ministry of Railways will be tasked with drafting a detailed implementation plan. The plan will outline technical specifications for freight wagons, scheduling protocols, and safety measures to be adopted on metro lines. The Ministry is expected to submit the plan to the GST Council within 30 days of the decision.
Broader Context of Freight Policy
India’s freight policy has undergone several reforms in recent years, including the introduction of the National Logistics Policy and the expansion of the Dedicated Freight Corridor (DFC) network. The proposed use of metro corridors is seen as a complementary measure that could bridge gaps in the DFC’s reach, especially in densely populated urban areas.
Experts also point out that the proposal aligns with the government’s goal of reducing carbon emissions by shifting freight from road to rail. Metro rail corridors, powered largely by electricity, offer a cleaner alternative to diesel‑powered trucks.
Next Steps for the GST Council
The council’s meeting on 27 September will include a review of the draft resolution and a vote by the 13 member states and the central government. A majority vote is required for the proposal to become law. The council will also consider any amendments suggested by the states, particularly those with significant metro infrastructure.
Once approved, the new regulation will be published in the Gazette of India and will come into effect on 1 January 2027, giving stakeholders time to adjust logistics plans and comply with the new tax framework.
