India's logistics costs for the mining and metals sector may be significantly lower than widely cited estimates, but structural bottlenecks such as weak first- and last-mile connectivity and heavy dependence on road transport continue to undermine the sector's competitiveness, former NITI Aayog member V K Saraswat said on Friday.
Logistics Costs Lower Than Estimates, But Bottlenecks Remain
Speaking at the FICCI conference on "Enhancing Competitiveness of Mining and Metals," Saraswat said logistics costs for the sector "may be far closer to 8 per cent of GDP than the widely cited 14 per cent figure." However, he stressed that key structural issues remain unresolved.
"Bulk freight bottlenecks and mining-specific evacuation gaps are still real and costly," Saraswat said, identifying inadequate first- and last-mile connectivity from mines and over-reliance on road transport as the two biggest challenges facing the sector.
Road Transport Cost Disadvantage
According to a FICCI press release, Saraswat noted that road haulage for bulk commodities can cost "two to three times more per tonne-kilometre than rail," underscoring the urgent need to shift more mineral freight to rail and other efficient transport modes.
He proposed a multi-pronged strategy to improve logistics efficiency, including dedicated mineral freight corridors, wider use of conveyor systems and slurry pipelines, faster port mechanisation, regional mineral logistics parks, expanded rail connectivity to mining clusters, and greater digitalisation across the logistics value chain.
Emerging Technologies for Mining Logistics
Saraswat highlighted six emerging technologies that could improve mining logistics: autonomous haul trucks, AI-based dispatch optimisation, drone-assisted surveying, robotics, digital twins, and satellite fleet monitoring integrated with 5G connectivity.
"Logistics must be recognised as a strategic determinant for mining and metals competitiveness," he said.
FICCI-Deloitte Study Findings
A joint FICCI-Deloitte study released at the conference found that while India's freight tariffs are broadly competitive with global benchmarks, "fragmented logistics and heavy road reliance are eroding this advantage."
Indian Railways' Initiatives
Addressing the conference, Railway Board Additional Member (Traffic) Devendra Kumar said Indian Railways is expanding end-to-end logistics solutions and testing operational innovations to improve freight movement. He said the railways have conducted trials of clubbing two or three freight trains together and added that "two-kilometre-long trains already run elsewhere could run in India."
The conference brought together policymakers and industry leaders to discuss ways to improve freight efficiency, strengthen first- and last-mile connectivity, and enhance logistics infrastructure to support the long-term growth of India's mining and metals sector.
