The central ministers of India in a statement have said that the logistics cost of India, which is currently far higher than major economies around the globe like the US, the EU, and China, is ready to become competitive in the upcoming five years with significant economic efficiency gains and last-mile connectivity for people even in rural locations. The union minister for road transport and highways, Nitin Gadkari said that the increasing infrastructure investment in the nation has resulted in enhanced mobility which is expected to result in major savings for the Indian economy as logistics costs are set to come down to 10% from 16-18% which is currently the rate.
Building new modern infrastructure and transforming mobility is the key element for the revival strategy of India’s economy and under the Prime Minister’s Gati Shakti mission, many ministers are collectively making efforts to make that a success. Ashwani Vaishnaw, who is the railway minister addressed that embracing new fuels like hydrogen, maintaining higher capital expenditures, and increasing the share of good transport to the railways is a great strategy to decrease the logistics costs were the major agendas of the event.
The transportation cost in the present day is very high and if the transport ministry can bring the logistics cost to 10%, it would also increase the exporters one and half times.
Jyoriraditya Scindia, the minister of civil aviation, said in his conclave speech that the growth of air travel is increasing as it becomes a more popular mode of transportation, particularly in smaller cities, and that it is not just international or inter-metropolitan travel that is driving growth for the aviation industry. He also added that the main focus of the government is to make mobility more accessible to the citizens as well as to ensure last-mile connectivity in border towns. The assembly captured the national mobility revolution which will work towards the economical growth of the country on a long-term basis by making transportation sustainable, efficient, and more economical.
According to the union minister Nitin Gadkari, reducing India’s logistics costs to about 10% would put them on a level with the 11–12% logistics costs in Europe, the 10% logistics costs in the US, and the below 10% logistics costs in China. He also mentioned that the trucks fuelled with renewable energy like electric mobility, liquified natural gas (CNG), and ethanol will help to reduce the transportation cost through an improved road network. The transportation cost in the present day is very high and if the transport ministry can bring the logistics cost to 10%, it would also increase the exporters one and half times. With an estimated capital allocation of at least 3 lakh crore each year starting in the following year, the public airline will increase its investment according to railway minister Ashwani Vaishnaw.
Nitin Gadkari said that the increasing infrastructure investment in the nation has resulted in enhanced mobility.
The rise of 14% was seen by the Indian Railways in capital expenditure to a total of Rs 2.45 lakh crore in FY 2022-23 from last fiscal year with Rs 2.15 lakh crore. Increased capital expenditures could support railroads’ efforts to modernize their business. The minister also informed that the first Indian hydrogen train is likely to be operational by August 15 of 2023, while highlighting that India’s share of the railway in terms of goods and transport has seen a significant downfall since 1950, causing a hike in the country’s logistics cost.
Now that the Indian government has taken steps to increase and improve the financial health of the logistics sector, the telecom market of India is capable to attract new players in the industry.