Improving logistics access for MSMEs could unlock significant rail freight opportunities: FICCI-KPMG report

As India looks to reduce logistics costs and improve freight efficiency, enhancing rail accessibility for MSMEs could emerge as a key lever for unlocking the next phase of rail freight growth. Against this backdrop, FICCI and KPMG in India today released a knowledge paper titled "Unlocking rail freight growth: Making rail accessible for India's MSMEs" at the 7th edition of FICCI's Smart Railways Conclave, ‘Future Rail India 2026’. The knowledge paper examines how addressing barriers related to accessibility, aggregation, terminal infrastructure and wagon availability can help unlock significant rail freight opportunities among India's MSMEs.

The paper highlights that while rail continues to enjoy a significant structural cost advantage over road transport, many MSMEs remain dependent on road logistics due to challenges such as fragmented consignments, limited cargo aggregation mechanisms, inadequate terminal access, first and last-mile connectivity constraints, service unpredictability and difficulties in accessing suitable rolling stock.



Key insights
The study introduces three frameworks to assess and improve rail accessibility:

• Total Logistics Cost and Impact (TLCI) Framework, which evaluates logistics decisions beyond freight rates by accounting for time, uncertainty and business impacts.
• Market Aligned Terminal Accessibility (MATA) Model, which assesses the effectiveness of freight terminals across commercial, technical, access and institutional dimensions.
• Wagon Access and Availability (WAA) Model, which evaluates whether rolling stock availability, design and procurement align with the needs of emerging freight segments and smaller shippers.
• The report recommends strengthening freight aggregation platforms, modernising common-user terminals, improving digital visibility and customer interfaces, enhancing first- and last-mile connectivity, and adopting demand-led wagon planning to improve rail accessibility for MSMEs.

Sameer Bhatnagar, Partner and Lead - Mobility & Logistics, KPMG in India, said, in a statement, "One of the largest untapped opportunities for rail freight growth lies in improving accessibility for MSMEs. Moreover, rail operates across the country on a uniform operating system on a non-discriminatory basis and is therefore, capable to offer competitive logistics services to them. By addressing accessibility concerns, rail and MSMEs can gain symbiotically and play a pivotal role in India's freight ecosystem and economy.”

The knowledge paper concludes that the future of rail freight competitiveness will depend not only on how efficiently freight moves across the network, but also on how easily businesses can access that network. It advocates a shift from a network-centric approach to an access-centric one through demand-led terminal planning, freight aggregation systems, multimodal connectivity, digital service delivery and rolling stock strategies aligned with emerging freight demand.