Indian railways plans to ease parcel policy, allow contract extensions

New Delhi: Indian Railways plans to liberalise its parcel policy to allow two-year contract extensions with escalating lease rates, with an aim to provide more predictable commercial terms to users.

"The existing policy did not have extension provisions beyond three months, and that too only by citing administrative delays," a senior official told ET. The new norms will also spell out relaxed termination clauses for overloading instances.

Extension of long-term (three-year) parcel leasing contracts will be considered if no penalties were imposed on lease holders for overloading during the term of the contract, the official said. Two extensions of one year each can be given with a 10% escalation of the prevailing lumpsum leased freight rate with each iteration.


The railways also plans relaxing some penal provisions pertaining to overloading in parcel vans. Under the new policy, concessions will be terminated if overloading is detected on more than four (up from two) occasions in any one contract. These contracts will be terminated with forfeiture of security deposit.

The security deposit requirement is also expected to be halved, with just 5% of the annual bid value for parcel leasing contracts needed in future bids.

A circular issued in November 2025 already scrapped the ₹10-crore annual minimum net revenue criteria for participants to submit tenders for leasing parcel cargo express trains. The ₹50-lakh minimum annual net revenue needed for aggregating parcels was also removed.