Decarbonising India’s Logistics Sector

• 22 Apr 2025

For Prelims:  Net zero emissions, Greenhouse gas (GHG), National Logistics Policy (NLP), PM Gati Shakti, Economic Survey 2023-24, Vision India@2047, World Bank’s Logistics Performance Index. 

For Mains: State of Emission from Logistics Sector, Challenges in Decarbonising Logistics Sector, Way Forward for Sustainable Logistics Sector, Key Issues Associated with India's Logistical Sector. 

Source: TH 

Why in News? 

India’s logistics sector, vital for economic growth and Vision India@2047, is among the most carbon-intensive. With a net-zero target by 2070, greening logistics is key to sustainable and inclusive development. 

What is the Current Emissions Profile of India’s Logistics Sector? 

• India: India’s logistics sector contributes about 13.5% of the country’s total greenhouse gas (GHG) emissions.  
  • Road transport dominates, managing nearly 90% of passenger and 70% of freight movement, and accounts for over 88% of sectoral emissions, trucks alone contribute around 38% of CO₂ emissions (IEA, 2023). 
  • Domestic aviation contributes about 4% to emissions, while coastal and inland shipping emit less than road freight. Warehousing also adds significantly due to high energy use.  
  • The government plans to triple inland waterway traffic and increase coastal shipping by 1.2 times by 2030, risking higher emissions if not managed sustainably. 
• Global Scenario: 
  • Globally, the logistics sector accounts for around 7% of GHG emissions. 

What are the Major Challenges in the Decarbonising Logistics Sector?  

• Heavy Reliance on Road Transport: In India, roads dominate logistics due to inadequate rail and multimodal linkages. Roads carry 64.5% of freight and serve 90% of passenger traffic in India. 
  • This high dependence on diesel-fueled trucks makes rapid decarbonization technologically and economically challenging. 
• Fragmented and Unorganized Sector: India’s logistics sector is largely unorganized, with over 85% of trucks owned by individuals or small operators, which hinders coordinated adoption of green technologies, emission tracking, and data sharing, making large-scale decarbonization efforts difficult. 
• High Transition Costs & Limited Infrastructure: Transitioning to EVs or hydrogen vehicles requires significant upfront investment, with EVs costing 20-50% more than comparable Internal Combustion Engine (ICE) vehicles.  
  • Small fleet operators face limited access to green finance, and low-carbon fuels are more expensive than diesel, especially in emerging economies. 
  • Additionally, the scarcity of EV charging and hydrogen fueling stations, along with India's reliance on fossil fuels for over 70% of its electricity (CEA, 2023), hampers the effectiveness of electrification. 
• Limited Adoption of Public Transport: The underdeveloped public transport infrastructure and infrequent services in many areas limit the potential for using public transport for freight, leading to continued reliance on carbon-intensive private vehicles leading to emissions and inefficiency in logistics operations. 

Click Here to Read More: Challenges in Transport Decarbonisation 

What are the Government Initiatives for the Decarbonising Logistics Sector? 

• National Logistics Policy 2022: It aims to reduce logistics costs to 8%-9% of GDP by 2030 (from 13-14% of GDP) and be among the top 10 in the LPI (Logistics Performance Index) by 2030. 
• PM Gati Shakti National Master Plan: It integrates infrastructure across highways, railways, and ports, promoting multimodal connectivity and reducing emissions. 
• Dedicated Freight Corridors (DFCs) and Multimodal Logistics Parks (MMLPs) enhance rail and road connectivity, optimizing transport efficiency and reducing carbon footprints. 
• FAME Scheme  
• Unified Logistics Interface Platform (ULIP) 
• LEADS (Logistics Ease Across Different States): Ranks states based on the efficiency of their logistics ecosystem. 
• PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme 
  

What Measures Can be Taken to Reduce Emissions in India's Logistics Sector? 

• Structural Shift from Road to Rail:  India should increase the use of railways for freight transport, using its electrified rail network to cut emissions.  
  • Countries like the US and China have invested heavily in expanding their rail networks, which helps reduce freight transport emissions.  
    • Electrified rail is a nearly zero-carbon option, making it a sustainable choice for long-distance freight. 
• Promoting EVs and Alternate Fuels: India should promote EV adoption in logistics through subsidies, charging infrastructure, and battery support, while also encouraging alternate fuels like CNG and biofuels. A strong policy framework and public-private investment are key to this transition. 
• Boost Coastal Shipping and Inland Waterways:  India should enhance coastal shipping and inland waterways for freight transport, as these modes offer low carbon emissions.  
  • Adopting cleaner technologies like LNG-powered vessels, solar-assisted boats, and biofuel-run barges will improve sustainability.  
  • Aligning with the International Maritime Organization's (IMO) target to cut global shipping emissions by 50% by 2050, these initiatives will support India's decarbonisation efforts. 
• Towards Sustainable Aviation: Though air freight is a challenging sector to decarbonise due to its reliance on refined fuels, India can focus on enhancing aviation efficiency by investing in sustainable aviation fuels (SAFs) and promoting greener aircraft technologies. 
  • Additionally, integrating low-carbon solutions in other transport sectors can help offset emissions from air freight. 
• Promoting Warehousing: India should promote green warehouses using renewable energy, energy-efficient materials, and smart automation systems to reduce emissions and enhance sustainability in the logistics sector. 
• Regulating Emissions: India should introduce strict emission standards for the logistics sector, promote carbon credit or trading systems, and ensure compliance through regular audits and transparent reporting to drive sustainable practices. 

India’s Logistical Sector 

Click Here to Read More: Key Issues in India's Logistical Sector, Enhancing the Efficiency of the Logistical Sector 

Conclusion 

To achieve net-zero emissions by 2070, India must focus on making its logistics sector more sustainable. This can be done by boosting rail freight, making road transport electric, using clean fuels for ships, and improving energy efficiency in warehouses. With the right policies, technology, and private sector involvement, India can build a greener, more efficient logistics system for the future. 

Drishti Mains Question:

Discuss the challenges and opportunities in decarbonizing India's logistics sector. Highlight the key government initiatives. 

UPSC Civil Services Examination Previous Year Question (PYQ) 

Q. The Gati-Shakti Yojana needs meticulous coordination between the government and the private sector to achieve the goal of connectivity. Discuss. (2022)