As India strives to balance rapid economic growth with ambitious sustainability goals, the logistics sector presents a unique challenge. On one hand, it’s a backbone of the economy, enabling trade and connecting industries across vast regions. On the other hand, it is one of the largest contributors to carbon emissions. The upcoming Union Budget has a critical opportunity to address both sides of this equation by fostering technology driven, sustainable practices in logistics, specifically through the integration of Artificial Intelligence (AI).

For India to meet its sustainability targets, it is clear that the logistics sector must adopt smarter, greener technologies. AI, alongside the Internet of Things (IoT), robotics, and automation, can play a transformative role in reducing the carbon footprint of logistics operations. However, for these technologies to be fully realised and scaled, the government must take concrete steps in the upcoming budget to support their widespread adoption and integration into the sector.

One of the primary budget expectations from the logistics industry is a strong push towards building AI-enabled infrastructure. Smart infrastructure, including IoT-based transport systems, automated warehouses, and data-driven logistics parks, would allow companies to streamline operations and reduce waste. By investing in such technology, the government can create a foundation for more efficient and sustainable logistics operations, improving both the sector’s environmental footprint and its competitiveness on the global stage.

The upcoming budget should focus on incentivising the private sector to adopt these technologies. This could include offering tax rebates, grants, or subsidies to logistics companies that invest in AI and other green technologies. These incentives would help accelerate the transition to a more sustainable logistics network, reducing emissions from freight transport. AI can optimise fleet operations, ensuring that vehicles are running as efficiently as possible, and minimising fuel consumption. Such measures would not only cut down emissions but also lower operating costs for businesses, creating a win-win scenario.

Moreover, a key focus should be on modernising India’s Dedicated Freight Corridors (DFCs). These corridors, equipped with real-time data analytics and AI-powered tools, can optimize the flow of goods, reduce congestion, and cut down on fuel waste. The budget could propose investment in AI technologies that would make these corridors more efficient, ensuring that logistics companies can move goods faster and more sustainably. With the addition of AI driven route optimisation, these corridors could minimise delays, cut down on carbon emissions, and reduce operational costs all while increasing the competitiveness of Indian logistics on the global stage.

Additionally, fostering public-private partnerships (PPPs) will be essential for driving forward innovations in logistics. The upcoming budget should prioritize collaborations that focus on the development of autonomous vehicles, drones, and AI based predictive analytics. These technologies hold the potential to revolutionize logistics by reducing human error, optimising delivery times, and lowering emissions. Creating an environment for experimentation and regulatory testing such as regulatory sandboxes would encourage innovation while maintaining safety standards.

The budget should also focus on the development of skill-building initiatives, particularly in the area of AI, robotics, and automation. As technology becomes more integrated into the logistics ecosystem, it’s critical that the workforce is equipped to handle these advancements. The government should allocate funds for training programs that provide the workforce with the skills needed to work with AI-driven tools and green technologies. This will ensure that India’s logistics professionals remain competitive and able to implement the technologies that will shape the future of the industry.

Finally, there needs to be a strong push toward investing in green technologies within the logistics sector that go beyond just vehicles. AI and IoT can optimize routing and traffic management, reduce congestion, and improve fuel efficiency. These improvements can dramatically cut emissions from road freight, making logistics operations more sustainable without the immediate need to rely on electric or hydrogen-powered vehicles.

The upcoming Union Budget has the potential to catalyse a significant shift toward sustainability in India’s logistics sector. By prioritising investments in AI, green technologies, and smart infrastructure, the government can enable logistics companies to reduce their environmental impact while boosting efficiency and global competitiveness. The road ahead is one where technology and sustainability go hand in hand and with the right policies in place, India can lead the world in creating a greener, more efficient logistics ecosystem.