Context: The vision of Viksit Bharat @2047 – a developed, resilient, and self-reliant India cannot be truly realised without transforming India's logistics sector to become more efficient, inclusive, and environmentally sustainable.
Relevance of the Topic : Mains: India’s logistics sector: challenges, govt. Initiatives and way forward.
Present Scenario of Logistics Sector in India:
- The logistics sector in India is valued at $250 billion and contributes 14% to India’s GDP.
- India’s logistics cost is 12-14% of GDP, much higher than developed nations (8-10%) indicating both inefficiency and higher fuel usage. Logistics cost has slid 0.8-0.9 percentage points of GDP between FY14-22.
- India is elevated to the 38th rank (among 139 nations) in the World Bank's Logistics Performance Index Report, 2023.
- The sector’s high carbon footprint poses a significant obstacle to sustainable development and climate goals.
India's Carbon-intensive Logistics Sector
- India’s Logistic Sector is one of the most carbon-intensive in the world. According to the International Energy Agency (IEA).
- The transportation sector contributes about 13.5% of India’s total GHG emissions, with road transport alone making up over 88%.
- Domestic aviation accounts for around 4%, while coastal and inland shipping adds to the emissions load, but is significantly less than the road freight movement.
- The warehousing sector, which supports freight movement, is another major contributor due to high energy consumption.
As the nation moves towards a net zero carbon emission by 2070, it is imperative to reduce emissions of transportation, warehousing, and supply chain emissions.
Government Efforts to decarbonise Logistics Sector
Recognising the urgency of sustainable logistics, the Government of India has launched some initiatives such as:
- Plan to significantly expand the use of inland waterways and coastal shipping by 2030. The amount of cargo and passengers moved through rivers and canals (inland waterways) is expected to increase three times and the cargo moved through coastal routes (along the sea) is expected to grow by about 1.2 times. This will make transportation cheaper and more environmentally friendly compared to road or air transport.
- Introduction of overhead electric wires along highways to power electric trucks. The first pilot project on the Delhi-Jaipur corridor could be a breakthrough in reducing emissions from freight movement while ensuring high efficiency and economic viability.
Also Read: Logistics Sector in India
How can India make the logistics sector more sustainable?
- Learning from Global Best Practices: China has significantly expanded its railway freight infrastructure, resulting in railways accounting for approximately 50% of total freight share. India can replicate it by increasing rail’s modal share in freight, given its high electrification levels and near-zero carbon footprint.
- Decarbonising Road Freight: India's road freight transport requires a comprehensive structural transformation to achieve decarbonisation. The recent deployment of overhead electric catenary systems along key highways represents a significant initial step towards reducing carbon emissions in long-haul road transport.
- Leveraging Coastal Shipping and Inland Waterways as Green Freight Corridors: In alignment with International Maritime Organisation's target of reducing global shipping emissions by 50% by 2050 (relative to 2008 levels), India can expedite its green transition by deploying LNG-powered vessels, solar-assisted electric boats, and biofuel or electric barges.
- Promoting Sustainable Aviation Fuels (SAFs): Air transport remains difficult to decarbonise due to dependence on high-emission refined fuels. India should invest in Sustainable Aviation Fuels (SAFs) and incentivise their adoption through policy support.
- Sustainable Warehousing: Transitioning to renewable energy sources such as solar, wind, and geothermal power can drastically cut the carbon footprint of warehouses.
Decarbonising India’s logistics sector is not just about cutting emissions. It is about building a more competitive, resilient and future-ready industry. Decarbonisation of India’s logistics sector is the key to ensuring sustainable economic growth.