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India can save 3.11 trillion worth of fuel used in logistics till 2050: report

At present, logistics comprises about 13% of the total costs for Indian companies, making exports uncompetitive vis-a-vis China. (Ramesh Pathania/Mint)Premium
At present, logistics comprises about 13% of the total costs for Indian companies, making exports uncompetitive vis-a-vis China. (Ramesh Pathania/Mint)

  • According to the report from Niti Aayog and Rocky Mountain Institute, India can reduce its logistics cost by 4% of the country’s gross domestic product and achieve 10 gigatonnes of carbon dioxide emission savings till 2030 through clean measures

India can save 3.11 trillion worth of fuel till 2050 by deploying clean and cost-effective mode of goods transportation, according to a report from Niti Aayog and Rocky Mountain Institute (RMI).

The report said India can reduce its cost of logistics by 4% of the country’s gross domestic product (GDP) and reduce 10 gigatonnes of carbon dioxide emissions till 2030 through these measures.

At present, logistics comprises about 13% of the total costs for Indian companies, making exports uncompetitive vis-a-vis China.

According to the report titled "Fast Tracking Freight in India: A Roadmap for Clean and Cost-Effective Goods Transport", “Due to the rising demand for goods and services, freight transport demand is expected to grow rapidly in the future. 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."

The report added that India also has the potential to “reduce nitrogen oxide (NOx) and particulate matter (PM) emissions by 35% and 28%, respectively, until 2050".

“India handles 4.6 billion tonnes of goods each year, amounting to a total annual cost of 9.5 lakh crore (trillion)," according to the report.

This comes at a time when India is running the world’s largest clean energy programme and is seeking a global leadership role in tackling climate change. As part of this, India is working to push its electric vehicles (EV) programme, with the government approving a 18,100 crore production linked incentive (PLI) scheme to make lithium-ion cells, to attract investments worth 45,000 crore.

“Freight transportation is a critical backbone of India’s growing economy, and now more than ever, it is important to make this transport system more cost-effective, efficient, and cleaner. Efficient freight transport will also play an essential role in realizing the benefits of existing government initiatives such as Make in India, Aatmanirbhar Bharat, and Digital India," said Sudhendu J. Sinha, adviser, transport and electric mobility, Niti Aayog, in a statement.

As part of India’s biggest-ever push for green mobility, Convergence Energy Services Ltd (CESL) aims to supply 200,000 two-wheeled electric vehicles (EVs) and 300,000 three-wheeled EVs across India. CESL plans to halve the cost of ownership of these vehicles through incentives offered under phase 2 of the Union government’s Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (Fame) scheme, state government subsidies, support from EV makers and carbon credits that will be earned under the United Nations’s Clean Development Mechanism.

“This transformation will be defined by tapping into opportunities such as efficient rail-based transport, the optimization of logistics and supply chains, and shifts to electric and other clean-fuel vehicles. These solutions can help India save 311 lakh cr cumulatively over the next three decades," said Clay Stranger, managing director, RMI, in the statement.

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