Nitin Gadkari Aims to Lower India's Logistics Cost to Single Digits by 2026

Team Finance Saathi

    18/Oct/2024

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Union Minister Nitin Gadkari announced that India's logistics costs would drop to a single-digit figure, targeting 9% within two years due to ongoing infrastructure developments.

He highlighted the growth of India's automobile industry, aiming to make it the largest in the world and noting its contribution to significant job creation.

Gadkari also discussed solutions for stubble burning, emphasizing crop waste processing and the use of recycled materials in road construction.

At a recent NITI Aayog event, Union Minister for Road Transport and Highways, Nitin Gadkari, announced ambitious plans to reduce India's logistics cost to a single-digit figure, specifically targeting 9% within the next two years. This initiative is closely tied to the ongoing construction of highways and expressways, which are expected to enhance the efficiency of transportation across the nation. According to estimates from the National Council of Applied Economic Research (NCAER), logistics costs in India were between 7.8% and 8.9% of GDP for the financial year 2022-23, indicating a pressing need for improvements in this sector.

In addition to logistics, Gadkari emphasized India's potential to export alternative fuels and biofuels, highlighting the significance of low-quality coal in the production of methanol. This move not only aligns with global sustainability goals but also positions India as a key player in the alternative energy market.

Gadkari's ambitions extend to making India's automobile industry the largest globally, building on the country's current status as the third-largest market, having overtaken Japan. The industry's growth trajectory has been remarkable, increasing from US$ 89.25 billion (approximately Rs. 7.5 lakh crore) in 2014 to US$ 214.21 billion (approximately Rs. 18 lakh crore) in 2024. This growth has significantly contributed to job creation, further solidifying the automobile sector's role in India's economy.

The Minister also discussed innovative approaches to enhance infrastructure while minimizing environmental impact. He noted the increasing use of recycled materials, such as tyre powder and plastic, in road construction, which helps reduce dependence on bitumen imports. This shift towards sustainability not only lowers costs but also promotes environmental responsibility.

In addressing the pressing issue of stubble burning in Punjab and Haryana, Gadkari proposed utilizing crop waste to increase farmers' incomes while tackling pollution. The plans include scaling up the processing of parali (crop residue) to mitigate seasonal pollution, thus providing farmers with alternative revenue streams and promoting cleaner air.

Through these comprehensive strategies, Gadkari aims to foster a robust logistics network, support sustainable development in the automobile industry, and tackle environmental challenges, positioning India for a future of growth and sustainability.

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