India's logistics cost will come down to 9% of GDP in next two years: Gadkari

New Delhi: Union Road Transport and Highways Minister Nitin Gadkari on Thursday said India's logistics cost will come down to 9 per cent of GDP within the next two years as the ministry is constructing several highways and expressways.

"Within two years, we are going to reduce our logistics cost to 9 per cent," he said while addressing an event organised by Niti Aayog.

According to Gadkari, currently logistics cost in India is 14 per cent, while logistics cost is around 12 per cent in major European countries and the United States.

He said logistics cost is around 8 per cent in China.

According to quick estimates of the economic think tank National Council of Applied Economic Research (NCAER), logistics costs in India ranged between 7.8 per cent to 8.9 per cent of GDP for fiscal 2021-22, while the Economic Survey 2022-23 highlighted that it was 14-18 per cent of the GDP, which is significantly higher than the global standard of around 8 per cent.

Gadkari said there is huge potential for India to export alternative fuels and biofuels.

He also pointed out that low-quality coal is useful for making methanol.

The minister added that India is making significant strides in the biofuel sector, especially in methanol.

Gadkari also said he aimed to make the Indian automobile industry number one in the world.

Last year, India had overtaken Japan to become the third-largest automobile market in the world, only behind the US and China, he added.

The size of India's automobile industry rose from Rs 7.5 lakh crore in 2014 to Rs 18 lakh crore in 2024, and this industry is creating a maximum number of jobs, Gadkari added.

The minister also stressed that materials like recycled tyre powder and plastic are being utilised in road construction, which helps in the reduction of bitumen imports.

He also explained how the initiative of using crop waste is helping to increase the incomes of farmers across the country.

He said that right now, "we can process one-fifth of the Parali, but with better planning, we can reduce the seasonal air pollution from stubble-burning by using parali as raw material for alternative fuels".

India needs to move ahead with a policy, which is cost-effective, indigenous, import substitute and employment-generating to address the major issues of rising pollution and fossil fuel imports, he added.