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Technology Framework for India’s Road Freight Transport: A report

Road freight is India’s most important mode of domestic cargo transport. However, road freight in the country is also plagued by inefficiencies leading to lower average speeds, underutilization of vehicles, higher pollution per unit of cargo transported, and higher transit times compared to regional and international benchmarks.

While some of these inefficiencies are the result of infrastructure bottlenecks related to roads and the transit of cargo vehicles within large urban and industrial clusters, significant on road hurdles arise due to regulatory issues.

Poorly enforced regulations related to the collection of indirect taxes and legislation on standards related to vehicular, environmental, and human-health impose a number of on-road checks on vehicles, both random and at designated check posts. This paper delves into operational challenges posed to road freight operators and identifies specific institutional and process-oriented gaps based on internal analysis, discussions with domain experts, and consultations with transport operators.

The paper suggests an alternative system that integrates multiple agency databases, such as the Goods and Services Tax (GST) E-way bills, the national vehicles database (VAHAN), and presents a process flow that includes intelligent technology-enabled cross-departmental integrated mobile squads that provide single window enforcement of tax and nontax regulations related to road freight transport.

These goals are in sync with the Government of India’s vision of digital India setting new global benchmarks in ease of doing business. The model creates truly integrated domestic supply chains, adding strength to major government campaigns such as Make in India and Atmanirbhar Bharat Abhiyan (Self-Reliant India Campaign). It also serves the mandate of developing multimodal logistics parks in and around the main economic nodes of the country, linked by highly efficient road transport corridors.

This paper flows from an Asian Development Bank (ADB) supported study across Assam, Gujarat, Karnataka, and Telangana, which examined micro-level operational issues of road freight and the consequent challenges posed to the transporters and industry. Recommendations are based on the GST reforms, ongoing digital integration efforts, as well as best practices across other states. The paper presents plausible solutions to ease the enforcement challenges faced by both the government and private operators.

Furthermore, it explores a technology-based solution for simplifying and strengthening road freight enforcement across the country. For that, it introduces the concepts of Integrated Mobile Inspection Unit (IMIU) and Integrated Inspection Zone (IIZ) for the harmonization, simplification, and standardization of processes to achieve the target of “One Country–One Mechanism” for compliance and enforcement. It concludes by making a case for piloting the model and refining it before pan-India adoption.

About the authors:

Pritam Banerjee is a consultant at the Asian Development Bank.

Soumya Chattopadhyay is a senior program officer at the South Asia Department, Asian Development Bank.

Deepankar Sinha is a professor at the Indian Institute of Foreign Trade in Kolkata.

Prashant Sharma is a consultant at the Asian Development Bank.

This report was first published by the Asian Development Bank

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(Disclaimer: Views expressed in the article are personal)

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