Decarbonisation of India’s Logistics Sector: Need & Challenges

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India’s journey toward Viksit Bharat @2047 demands an efficient and environmentally sustainable logistics sector. With logistics costs at 13–14% of GDP and contributing 13.5% of national GHG emissions, decarbonising this sector is vital to achieving economic competitiveness and the Net Zero by 2070 goal. A shift to green, multi-modal, tech-driven logistics is imperative.

Need for Decarbonisation of India’s Logistics Sector

High Emissions Load: India’s logistics sector contributes 13.5% of total GHG emissions, with road transport accounting for 88%, making it among the most carbon-intensive globally.
Net Zero by 2070: Decarbonising transport and warehousing is essential to meet India’s Net Zero emissions target by 2070.
Road Dependency: 90% of passenger and 70% of freight movement relies on roads; trucks alone emit 38% of transport-related CO₂, necessitating a shift to cleaner modes.
Green for Resilience: Sustainable logistics reduces fossil fuel reliance, cuts costs, and builds resilient, efficient supply chains critical for economic stability.
Aligning with Global Targets: India must match global efforts like the IMO’s 50% cut in shipping emissions by 2050 and boost rail and water-based freight to ensure scalable, low-carbon logistics. (NITI Aayog)

Key Factors Driving Growth in India’s Logistics Sector

Government Reforms and Infrastructure: PM Gati Shakti integrates multimodal transport, supported by GST, and develops freight corridors and logistics parks, enhancing supply chain efficiency.
E-commerce and Last-mile Connectivity: E-commerce growth boosts demand for faster deliveries, focusing on expanding last-mile connectivity in Tier 2 and 3 cities through hyperlocal models.
Digital Transformation and Automation: AI-driven route optimisation, Iot fleet management, and blockchain enhance supply chain efficiency, accuracy, and transparency.
Rise of Cold Chain Logistics: The demand for temperature-sensitive goods from sectors like pharmaceuticals and agriculture drives cold chain infrastructure growth, backed by government support.
Demand for 3PL and 4PL Services: The increasing reliance on third-party and fourth-party logistics providers streamlines operations and reduces costs.

Government Initiatives in India’s Logistics Sector

PM GatiShakti: Enables comprehensive infrastructure planning for faster, more cost-effective logistics.
National Logistics Policy: Aims to cut logistics costs to 8% of GDP with digital and structural reforms.
Dedicated Freight Corridors: High-speed rail corridors (1,724 km) enhance freight efficiency.
Multi-Modal Logistics Parks: 35 parks with ₹50,000 crore investment for transport and warehousing integration.
Logistics Efficiency Enhancement Programme (LEEP): This program enhances freight speed, reduces costs, and improves tracking through technological and infrastructure upgrades.
Parivahan Portal & mParivahan App: Digital platform for vehicle and license services to streamline logistics operations.
e-Way Bill System: Mandates digital bills for goods over ₹50,000, easing interstate transport..
Sagarmala Programme: Focuses on port-led development and boosts coastal shipping efficiency.
Bharatmala Pariyojana: Develops highways and corridors to improve freight connectivity nationwide.

Challenges in Decarbonising India’s Logistics Sector

High Carbon Emissions from Road Transport: Road transport dominates India’s logistics sector (66%), significantly contributing to carbon emissions, with trucks and heavy vehicles being the primary culprits.
Lack of Infrastructure for Electric Vehicles: Limited charging infrastructure, a lack of freight-compatible EV models, and high initial costs hinder the adoption of electric and alternative fuel vehicles.
Energy Inefficiency in Warehousing: Indian warehouses often lack energy-efficient systems and rely on non-renewable energy, which increases carbon footprints.
Underutilisation of Rail and Waterways: Despite being more energy efficient, rail and waterways represent only 31% & 3% of freight transport, respectively, leading to a continued reliance on road transport.
Fragmented Regulatory Framework: India’s regulatory framework for green logistics is fragmented, featuring inconsistent policies and insufficient incentives for sustainable practices across the sector.

Strategies for Decarbonising India’s Logistics Sector

Promoting Electrification and Alternative Fuels: Investing in EV infrastructure and charging stations, along with incentivising electric vehicles for freight transport, will help reduce emissions..
Enhancing Energy Efficiency in Warehousing: Adopting energy-efficient technologies like solar panels, LED lighting, and green building certifications will reduce warehousing carbon footprints.
Expanding Rail and Waterway Usage: Increasing the share of rail and waterway freight transport can offer a more energy-efficient alternative to road transport and lower emissions.
Developing Green Logistics Infrastructure: Creating sustainable logistics hubs through renewable energy sources and environmentally friendly infrastructure will reduce environmental impact.
Implementing Comprehensive Green Logistics Policies: A regulatory framework that promotes green fleet management, eco-friendly warehouses, and low-carbon operations will create a sustainable logistics ecosystem.

India’s logistics sector has a bright future. The National Logistics Policy (NLP) aims to reduce logistics costs and enhance supply chain efficiency. The policy focuses on uniting stakeholders for improved coordination and streamlined operations.

Reference: The Hindu

PMF IAS Pathfinder for Mains – Question 162

Q. With logistics costs in India significantly higher than global standards, evaluate how greening the logistics sector can simultaneously reduce costs and emissions. Discuss the role of the National Logistics Policy and PM Gati Shakti in achieving this dual objective. (250 Words) (15 Marks)

Approach

Introduction: Examine India’s logistics costs (13–14% of GDP vs. global average of 8%) and its environmental impact (13.5% of GHG emissions), highlighting the need for sector greening.
Body: Discuss the benefits of greening India’s logistics sector and the role of the National Logistics Policy and PM Gati Shakti.
Conclusion: Emphasise that greening logistics is an environmental imperative and a strategic economic reform vital for achieving Viksit Bharat @2047 and India’s net-zero commitments.