India’s freight traffic is expected to grow by 7-8% every year for the next decade. However, the country’s transportation infrastructure is “insufficient, ill-equipped and ill-designed” to match this growth, according to a McKinsey report titled “Transforming the nation’s logistics infrastructure”. The country’s freight transport is still largely characterized by a road-based network, with the share of railways—best suited for transporting freight over long distances—expected to decline to 25% by 2020, against the global norm of 50%.
The cost of not fixing the logistics problems is huge: The report estimates that waste caused by poor logistics infrastructure will increase from the current $45 billion (around Rs2.12 trillion, or equivalent to 4.3% of today’s gross domestic product) to $140 billion or, around 5% of GDP, in 2020.
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Graphics: Ahmed Raza Khan/Mint; illustrations: Jayachandran/Mint
Compiled by Rahul Chandran