Context
The logistics sector accounts for five per cent of India's Gross Domestic Product (GDP) and employs 22 million people. In India, 4.6 billion tonnes of goods are handled every year, resulting in total annual costs of 116 billion US dollars. Most of these goods are transported by trucks and other vehicles. With the national freight transport volume set to increase about fivefold by 2050, India's freight transport ecosystem has a crucial role to play in reducing greenhouse gas emissions.
Making the freight transport sector more efficient and climate-friendly can also reduce logistics costs by ten per cent. This could lead to export growth of five to eight per cent. Logistics costs are estimated to be around 13 to 14 per cent of India’s GDP, which is higher than in most other countries. The Government of India has set a target to reduce these costs to 7.5 per cent by 2028. Another challenge for the logistics industry in India is the fact that it is highly fragmented.
To address these issues, the Ministry of Commerce and Industry, together with industry representatives, is currently preparing the national integrated Comprehensive Logistics Action Plan.
Objective
The country’s freight and logistics sector is more climate-friendly and efficient.
