Why Indian Railways is betting big on Vande Bharat: The numbers behind its expansion

Vande Bharat trains are becoming an increasingly important part of Indian Railways' passenger network, and the reason is not just faster journeys or better amenities.There is a stronger business case behind the expansion: premium AC passenger categories are among the few segments of Indian Railways' passenger business that generate profits.Financial performance data for FY25 shows that AC 3-tier and AC Chair Car were the only two passenger categories to report profits. This is significant for Vande Bharat because Chair Car services feature prominently on premium trains such as Vande Bharat and Shatabdi.As Indian Railways expands its Vande Bharat network and introduces sleeper services, the numbers point to growing demand for passengers willing to pay more for premium rail travel. THE PASSENGER SEGMENTS THAT MAKE MONEYIndian Railways' passenger operations remain loss-making across most categories.In FY25, losses ranged from Rs 20,705.94 crore in the Ordinary class to Rs 48.77 crore in First Class. AC 3-tier, however, generated a profit of Rs 3,645.44 crore in FY25. That was higher than the Rs 2,501.07 crore profit recorded in FY24, although below the Rs 3,300.08 crore reported in FY23.AC Chair Car also reported a profit of Rs 376.77 crore in FY25. The category had reported losses of Rs 203.96 crore in FY24 and Rs 297.62 crore in FY23.The contrast is important. While most passenger categories continue to put pressure on the railway's passenger finances, AC 3-tier and Chair Car are showing that premium travel can generate positive returns.WHY VANDE BHARAT FITS THIS MODELChair Car services are used predominantly on premium trains, including Vande Bharat and Shatabdi services, as well as select intercity routes.Vande Bharat fares are priced at a premium over Shatabdi fares, while Shatabdi itself has used dynamic fare pricing since 2018.This creates a different economics for premium rail travel. Passengers are paying more for faster services and a more premium travel experience, while Indian Railways gets access to a segment that has demonstrated an ability to generate profits.The data does not provide a standalone profit figure for Vande Bharat. But the profitability of the AC Chair Car category, combined with the strong demand for Vande Bharat services, provides an important part of the economic rationale for expanding the network.PASSENGERS ARE VOTING WITH THEIR TICKETSThe demand for Vande Bharat has grown sharply.The network carried approximately 3.98 crore passengers in FY26, up 34% from 2.97 crore passengers in FY25.Since the first Vande Bharat service was launched in 2019, the trains have carried more than 9.1 crore passengers across 1 lakh completed trips through March 2026.The New Delhi-Varanasi route has emerged as the busiest Vande Bharat corridor, carrying more than 73 lakh passengers since its launch.For Indian Railways, the sustained demand provides another reason to expand the premium train network.SLEEPER VANDE BHARAT TRAINS OPEN A NEW MARKETThe premium rail strategy is no longer limited to daytime Chair Car services.Indian Railways launched the Vande Bharat Sleeper service in January 2026, bringing the same premium positioning to long-distance overnight journeys.In its first three months, the service carried 1.21 lakh passengers across 119 trips.The service recorded an occupancy rate of more than 100% during the period, indicating demand strong enough to fill the available capacity and more.This is also why AC 3-tier becomes important to the Vande Bharat expansion story. The category generated Rs 3,645.44 crore in profit in FY25 and has consistently remained profitable over the past three financial years.The expansion of Vande Bharat Sleeper therefore gives Indian Railways an opportunity to tap into a segment that has already demonstrated strong financial performance.WHY RAILWAYS WANTS MORE PREMIUM TRAINSThere is a simple business logic behind the expansion.Indian Railways has to serve passengers across income groups, and several categories continue to operate at a loss. But the demand for premium services shows that there is also a market for passengers willing to pay more for comfort, speed and convenience.The Vande Bharat network currently has 162 services operating across the country.With passenger numbers rising and the sleeper version attracting strong demand, premium trains are becoming an increasingly important part of India's railway expansion.The bigger story, therefore, is not just about how many Vande Bharat trains India gets.It is about whether premium rail travel can become a stronger source of revenue and help improve the economics of passenger services as Indian Railways expands its network.NOTE: (With inputs from Richa Sharma)- EndsPublished On: Aug 17, 2026 09:26 IST