Paper: GS – III, Subject: Economy, Topic: Infrastructure, Issue: Steps to reform India’s logistics sector.
Context:
The logistics sector faces increasing climate-related disruptions such as flooded highways, warped rail tracks, and port shutdowns, making climate action a business imperative.
Key Highlights:
Economic Impact of climate crisis:By 2070, climate inaction in logistics may cause $35 trillion in losses, about 12.5% of India’s GDP. Conversely, timely action could yield $11 trillion in gains as per Deloitte report.
Significance of Logistics sector:
- Economic Backbone: The sector is critical to India’s rapid economic expansion and growing e-commerce.
Environmental Impact on logistics:
- High Emissions Contribution: Logistics accounts for 13.5% of India’s GHG emissions.
- Dominant Highway Freight Share: Road freight is expected to grow 4x by 2050, worsening emissions.
- Global Ranking: As India is the third-largest emitter of GHGs, the growing logistics may push may further worsen it.
- Need for Immediate Action: Business-as-usual will undermine net-zero goals and increase import dependency (oil import bill could reach $1 trillion by 2050).
Structural Reforms Needed:
- Multimodal Transport Shift: Logistics must move away from highways to rail, coastal, and inland waterways.
- Emission Reduction Targets: Maritime India Vision targets 30% cut in emissions per tonne of cargo by 2030.
- Digital and Decentralised Systems: India needs adoption of risk mapping, decentralised inventories, and predictive analytics.
- Adapting alternatives: EVs, LNG, hydrogen, and biogas are emerging options. Indian Railways’ initiatives like returnable jute bag can be adapted.
Three-Pillar Framework for Logistics Reform:
However, there is a need for bridging gaps in clean logistics finance, last-mile delivery, and rural integration.
Conclusion:
Logistics may become a drag on India’s growth story if reforms are delayed. India must innovate, decarbonize, and transform the sector to avoid economic and environmental disaster.
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