In a bid to enhance India’s economic competitiveness, the government is working towards reducing logistics costs to 9% of GDP within the next three years, announced Union Minister Nitin Gadkari on Wednesday. Currently, the logistics cost in the country ranges between 14% and 16% of GDP. Minister Gadkari made these remarks while addressing a gathering at an event organised by the Confederation of Indian Industry (CII).
Highlighting the potential benefits of reducing logistics costs, Gadkari emphasised that India’s exports would witness a significant boost once the logistics costs are brought down to single digits. Citing estimates, the government recognizes that logistics costs in India are presently in double digits. In order to achieve this objective, the government has already introduced a national logistics policy and launched the PM Gati Shakti initiative, aimed at enhancing industry competitiveness and reducing logistics costs.
Earlier this year, the Ministry of Commerce and Industry had announced the establishment of a task force responsible for formulating a framework to determine logistics costs in the country. The task force comprises representatives from NITI Aayog, the Ministry of Statistics and Programme Implementation (MOSPI), the National Council of Applied Economic Research (NCAER), academic experts, and other stakeholders.
Furthermore, Minister Gadkari revealed that the Ministry of Road Transport and Highways has proposed 260 ropeway and funicular railway projects worth Rs 1.3 lakh crore. He also mentioned that the ministry has identified land for 500 bus depots and is actively seeking investments from top industrialists to develop these facilities. Gadkari stressed the need for 2 lakh electric buses in India.
Gadkari expressed confidence that India would soon become a global economic powerhouse by leveraging economic viability, futuristic technology, and public-private partnerships in infrastructure development. He stated, “With well-functioning and developed road and transportation connectivity, we are poised to unlock the potential of the tourism sector, making tourism opportunities more affordable and accessible for individuals across all income strata.”
The minister emphasised the importance of prioritising ecology and environmental protection during developmental activities. Notably, India currently imports fossil fuels worth Rs 16 lakh crore. To reduce this dependency, the government has prioritised the use of ethanol, methanol, electric cars, bio-CNG, and bio-LNG in public transport to minimise pollution. Gadkari also highlighted the future potential of hydrogen fuel.
Regarding electric vehicle (EV) production, Gadkari revealed that India has risen from the fourth position to the third, surpassing Japan, and aims to become the leading EV producer within the next five years. He further mentioned that India, already a major exporter of cars, plans to export tractors, buses, and auto rickshaws in the future.
In an effort to alleviate traffic congestion, Gadkari announced the government’s plans to introduce sky buses. Through these initiatives, India aims to transition from being an energy importer to becoming a major exporter, showcasing its potential in the energy sector.
Minister Gadkari stressed the need for cost-effective transportation models, considering India’s lower paying capacity. He highlighted the government’s ongoing efforts to improve road connectivity, even in hilly areas, which would further boost tourism and generate employment opportunities.