India's Potential To Save Logistics Fuel Worth INR 311 Lakh Crore

Mobility Outlook Bureau

Mobility Outlook Bureau

9 Jun 2021
06:10 PM
1 Min Read

According to the report, India has the potential to reduce its logistics cost by 4% of the Gross Domestic Product (GDP).


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Owing to the rising demand for goods and services, freight transport demand is expected to grow rapidly in the future. However, while freight transport is essential to economic development, it is plagued by high logistics costs and contributes to rising CO2 (carbon dioxide) emissions, and air pollution in cities, states a report released by NITI Aayog, RMI and RMI India. 

The NITI Aayog is a public policy think tank of the Government of India while RMI is an independent nonprofit organisation and RMI India is an independent think-and-do tank that works with diverse stakeholders. 

According to the report 'Fast Tracking Freight in India: A Roadmap for Clean and Cost-Effective Goods Transport,' India has the potential to reduce its logistics cost by 4% of the Gross Domestic Product (GDP). The country can achieve ten gigatonnes of cumulative CO2 emissions savings between 2020 and 2050 and reduce Nitrogen Oxide (NOx) and Particulate Matter (PM) emissions by 35% and 28%, respectively until 2050. 

Sudhendu J Sinha, Adviser, Transport and Electric Mobility, NITI Aayog, said the freight transportation is a critical backbone of India's growing economy. Therefore, it is important to make this transport system more cost-effective, efficient, and cleaner. 

He opined that efficient freight transport will also play an essential role in realising the benefits of existing government initiatives such as Make in India, Aatmanirbhar Bharat, and Digital India.

Since s India's freight activity grows five-fold by 2050 and about 400 million citizens move to cities, a whole system transformation can help uplift the freight sector, the report stated.

Clay Stranger, Managing Director, RMI, said this transformation will be defined by tapping into opportunities such as efficient rail-based transport, optimising logistics and supply chains, and shifts to electric and other clean-fuel vehicles. According to him, these solutions can help India save INR 311 lakh crore cumulatively over the next three decades. 

The report outlines solutions for the freight sector related to policy, technology, market, business models and infrastructure development. The recommendations include increasing the rail network's capacity, promoting intermodal transport, improving warehousing and trucking practices, policy measures and pilot projects for clean technology adoption, and stricter fuel economy standards.

When successfully deployed at scale, the proposed solutions can help India establish itself as a leader in logistics innovation and efficiency in the Asia-Pacific region and beyond, the report stated.

Courtesy: RMI

Photo is representational.

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