Outside metro cities, Green Logistics struggles to gain momentum

Time of India

a day ago

Last-mile deliveries now contribute up to 40 per cent of city transport emissions—a twin burden on both business margins and urban air quality. As pressure mounts from regulators, investors, and consumers, India's logistics sector is being forced to rethink how goods move through its cities.
In response, metro hubs like Delhi, Mumbai, Hyderabad, and Bengaluru are becoming live testbeds for
green logistics
—where cleaner fuels, denser delivery networks, and return-to-base routes make sustainable solutions both feasible and impactful.
At the heart of this shift is the growing adoption of
Compressed Natural Gas (CNG)
and
Electric Vehicles (EVs)
for last-mile operations
One workaround gaining traction is a
two-tier logistics model
, already operational in Delhi. It involves using diesel trucks for long-haul transport to the city outskirts, followed by green vehicles for the last-mile leg.
"You often see large trucks stopping at the outskirts, and then goods are transferred to smaller CNG vehicles or even Boleros for the final leg into the city. This kind of last-mile movement works well because it fits into a return-to-base model. This two-tier logistics model ensures operational efficiency while also reducing emissions within city limits," says Sarthak Elwadhi, founder of TrucksUp.
That model is already scaling within urban networks—where both infrastructure and emission goals converge. As per Grant Thornton's findings,
last-mile delivery
is a natural starting point for decarbonisation with electrification expected to power 30 per cent of all last-mile deliveries by 2030.
It's a trend Prediman Koul, CEO of Jeena & Company is already seeing firsthand, "Our partnership with Tata Motors to convert our last-mile delivery fleet to electric vehicles has been successful in cities like Hyderabad, Bengaluru, Mumbai, Delhi, and Ahmedabad. We have successfully converted 25 per cent of our last-mile delivery fleet to EVs.'
City models don't scale—Yet
While
green logistics
solutions are proving effective in urban centres, scaling these models nationwide presents a significant logistical and financial puzzle as its adoption faces high initial cost.
"When it comes to longer hauls, CNG and EVs haven't gained the same traction," explains Elwadhi. "When we talk about transitioning to a green fleet—whether that's EVs or LNG vehicles—the initial investment is significantly higher compared to conventional diesel trucks.'
As per the Grant Thornton's Freight Forward report, only about one-third of India's heavy-duty truck fleet is expected to shift to LNG over the next 5–7 years. The lack of charging and LNG refueling stations on highways remains another major deterrent.
Even for companies committed to sustainability, the shift is slow and cautious. "It is always tough to move from the status quo, especially for businesses and large supply-chain-led operations like ours. A simple change can shake up the ecosystem; however, we are conscious that we are preparing for our future today," says Koul.
Intent needs to match pragmatism
However, investor appetite for sustainable logistics is rising sharply—private equity investments jumped 300 per cent in Q2 2025, especially into urban, EV-led models. Yet, this financial momentum hasn't been matched by policy or infrastructure support.
To take green logistics beyond city limits, the sector needs more than intent.
Expanded green financing, targeted subsidies, and infrastructure investments—especially for charging and refueling along long-haul routes—will be crucial. So will regulatory nudges, like mandating green freight quotas for large manufacturers or offering incentives such as priority access for low-emission vehicles.
As Elwadhi notes, 'Unless there are clear business advantages, it's tough to make that change.'
Collaboration across the ecosystem—from shippers and fleet owners to digital platforms and policymakers—is essential to make sustainability economically viable.