Cars stuck in traffic

Making freight transport in India more climate-friendly

Climate friendly freight transport in India (Green Freight)

+ Show all
  • Client

    German Federal Ministry for Economic Affairs and Climate Action (BMWK)

  • Co-financier

    International Climate Initiative (IKI)

  • Country
  • Political sponsors

    More

  • Runtime

    2019 to 2024

  • Products and expertise

    Sustainable Infrastructure

A truck leaves behind a cloud of exhaust.

Context

The logistics sector accounts for five per cent of India's Gross Domestic Product (GDP) and employs 22 million people. In India, 4.6 billion tonnes of goods are handled every year, resulting in total annual costs of 116 billion US dollars. Most of these goods are transported by trucks and other vehicles. With the national freight transport volume set to increase about fivefold by 2050, India's freight transport ecosystem has a crucial role to play in reducing greenhouse gas emissions.

Making the freight transport sector more efficient and climate-friendly can also reduce logistics costs by ten per cent. This could lead to export growth of five to eight per cent. Logistics costs are estimated to be around 13 to 14 per cent of India’s GDP, which is higher than in most other countries. The Government of India has set a target to reduce these costs to 7.5 per cent by 2028. Another challenge for the logistics industry in India is the fact that it is highly fragmented.

To address these issues, the Ministry of Commerce and Industry, together with industry representatives, is currently preparing the national integrated Comprehensive Logistics Action Plan.

Objective

The country’s freight and logistics sector is more climate-friendly and efficient.

A transhipment point for goods.

Approach

The project supports the Ministry of Commerce and Industry, Government of India in preparing and implementing the national integrated Comprehensive Logistics Action Plan. The main activities are:

  • Advising the Ministry of Commerce and Industry in setting up coordination and monitoring mechanisms for the Comprehensive Logistics Action Plan.
  • Assisting selected national authorities responsible for the freight sector in developing climate-friendly standards and regulations.
  • Developing and implementing measures to improve the logistics management and introducing climate-friendly technologies in selected cities to initiate a pilot project.
  • Improving the competencies of relevant authorities, private logistics companies and truck drivers, while setting up monitoring systems to reduce Greenhouse Gas (GHG) emissions.

Last update: July 2023