Resilience is crucial for rail transportation in terms of safety, operational efficiency, and transport policy. This study explores the role of resilience in rail transportation, emphasizing the growing integration of Internet of Things (IoT) technologies for asset monitoring, maintenance, and security. Motivated by the potential and risks of IoT adoption, the research aims to evaluate key policies supporting safe and efficient implementation. A hybrid methodology combining qualitative review and a structured survey of railway professionals in a developing country was employed. Using the Analytic Hierarchy Process (AHP) and Technique for Order Preference by Similarity to Ideal Solution (TOPSIS), seven decision criteria and three strategic policies were analyzed. The findings identify three critical criteria and one optimal policy strategy for effective IoT integration in the railway. The study highlights both opportunities, like predictive maintenance and real-time monitoring,—and challenges, such as data complexity and safety concerns. The study concludes with policy recommendations to address adoption pitfalls and enhance the resilience of rail systems through structured IoT implementation.