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VOL. 3
SECTORAL INSIGHTS:
TRANSPORT
SCENARIOS TOWARDS VIKSIT BHARAT AND NET ZERO Copyright© NITI Aayog, 2026
NITI Aayog
Government of India,
Sansad Marg, New Delhi–110001, India
Suggested Citation
NITI Aayog.(2026). Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights:
Transport (Vol. 3)
Available at: https://niti.gov.in/publications/division-reports
Disclaimer
1. This document is not a statement of policy by the National Institution for Transforming India
(hereinafter referred to as NITI Aayog). It has been prepared by the Green Transition, Energy &
Climate Change Division, NITI Aayog under various Inter-Ministerial Working Groups (IMWGs)
constituted to develop Net Zero pathways for India.
2. Unless otherwise stated, NITI Aayog, in this regard, has not made any representation or warranty,
express or implied, as to the completeness or reliability of the information, data, findings, or
methodology presented in this document. While due care has been taken by the author(s) in the
preparation of this publication, the content is based on independently procured information and
analysis available at the time of writing and may not reflect the most current policy developments
or datasets.
3. The assertions, interpretations, and conclusions expressed in this report are those of the author(s)
and do not necessarily reflect the views of NITI Aayog or the Government of India, unless otherwise
mentioned. As such, NITI Aayog does not endorse or validate any of the specific views or policy
suggestions made herein by the author(s).
4. NITI Aayog shall not be liable under any circumstances, in law or equity, for any loss, damage,
liability, or expense incurred or suffered as a result of the use of or reliance upon the contents of
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constitute or imply an endorsement by NITI Aayog. Readers are encouraged to independently verify
the data and conduct their analysis before forming conclusions or taking any policy, academic, or
commercial decisions. SCENARIOS TOWARDS
VIKSIT BHARAT AND NET ZERO
SECTORAL
INSIGHTS: TRANSPORT
(VOL. 3) Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport viiScenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport
Authors and
Acknowledgement
Chairperson
Dr. Anil Jain
Chairperson, Petroleum and Natural Gas
Regulatory Board (PNGRB)
Leadership
Sh. Suman Bery
Vice Chairman, NITI Aayog
Sh. B.V.R. Subrahmanyam
CEO, NITI Aayog
Dr. Anshu Bharadwaj
Programme Director, Green Transition,
Energy & Climate Change Division,
NITI Aayog
Sh. Rajnath Ram
Adviser, Energy, NITI Aayog
Sh. S.C. Gupta
Director, PNGRB
Core Modelling Team
Sh. Venugopal Mothkoor
Energy and Climate Modelling Specialist,
NITI Aayog
Dr. Anjali Jain
Consultant G-II, NITI Aayog
Sh. Nitin Bajpai
Consultant, NITI Aayog
Authors
NITI Aayog
Sh. Venugopal Mothkoor
Energy and Climate Modelling Specialist,
NITI Aayog
Dr. Anjali Jain
Consultant G-II, NITI Aayog
Sh. Nitin Bajpai
Consultant, NITI Aayog
Sh. Saksham Agarwal
Young Professional, NITI Aayog
Ms. Anupama Kumari
Consultant, NITI Aayog
Knowledge Partners
Sh. Madhav Pai
CEO, WRI India
Ms. Akshima Ghate
Managing Director, RMI India
Sh. Sharif Qamar
Associate director, TERI
Ms. Shreya Gupta
Research Associate, TERI
Sh. Amit Bhatt
International Council on Clean
Transportation (ICCT) Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport viii
Authors and Acknowledgement
Ms. Krithika P. R
Program Lead, ICCT
Ms. Ilika Mohan
Research Manager, ACPET
Peer Reviewers
Sh. KC Sharma
Ministry of Road, Transport and Highways
(MoRTH)
Sh. Sharath Kumar Pallerla
Scientist G, Ministry of Environment,
Forest & Climate Change (MoEFCC)
Sh. Pulkit Singhal
Director (Traffic), Ministry of Railways
Sh. Ved Bhushan
Director (Planning/ME), Ministry of
Railways
Ms. Neha Patel Bhattacharjee
Consultant (Engineering), PNGRB
Ms. Afshan Ameer
Young Professional, NITI Aayog
Working Group Coordinators
Sh. Kamil Bhullar
Deputy Director, NITI Aayog
Sh. Venugopal Mothkoor
Energy and Climate Modelling Specialist,
NITI Aayog
Working Group Members
Sh. Rajnath Ram
Member Secretary of the Group- Adviser,
Energy, NITI Aayog
Sh. Abhay Bakre
Former DG, BEE; Mission Director,
National Green Hydrogen Mission
Sh. R Lakshmanan
Joint Secretary, M/o PSW
Sh. Sudhendu Jyoti Sinha
Adviser (Infra Connectivity), NITI Aayog
Sh. Sharath Kumar Pallerla
Scientist G, Ministry of Environment,
Forest & Climate Change (MoEFCC)
Dr. Preeti Banzal
Scientist G, Office of PSA
Sh. KC Sharma
Advisor, MoRTH
Sh. Rajnesh Singh
Director, MHI
Sh. Pulkit Singhal
Director (Traffic), Ministry of Railways
Sh. Ved Bhushan
Director (Planning/ME), Ministry of
Railways
Sh. BPS Bhadoria
Director, MoHUA
Sh. Sameer Pandita
Director, BEE
Sh. Rajesh Asati
Deputy Secretary, MoPSW
Sh. Gaurav Katiyar
Joint Director, MoMSME
Sh. Dharmendra Kumar
Joint Director, M/o Finance
Ms. Ekta Agrawal,
Deputy Director, DGCA
Sh. Anubhav Uppal
Scientist D, MNRE Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport ix
Authors and Acknowledgement
Sh. Pradyut Pyne
Assistant Director, DEA
Sh. PK Banerjee
Executive Director, SIAM
Ms Akshima Ghate
Managing Director, RMI India
Sh. Amit Bhatt
Managing Director (India), ICCT
Sh. Sharif Qamar
Associate Director, TERI
Ms. Priti Shukla
Programme Manager, Shakti Sustainable
Energy Foundation
Collaborators/Expert Consultants
Sh. Neelesh Sah
Joint Secretary, Ministry of Environment,
Forest & Climate Change (MoEFCC)
Sh. Shard Sapra
Scientist F, Ministry of Environment, Forest
& Climate Change (MoEFCC)
Sh. Ajay Raghava
Scientist E, Ministry of Environment, Forest
& Climate Change (MoEFCC)
Sh. Paresh Kumar Goel
Former Director, MoRTH
Sh. Vipin Kumar
Assistant Director, MoMSME
Sh. Rahul Chakraborty
Former Associate Fellow, TERI
Ms. Namita Singh,
Researcher, ICCT
Sh. Abhishek
Associate Researcher, ICCT
Ms. Kartike Karwal
Deputy Director, SIAM
Ms. Trupti Deshpande,
Senior Program Manager, Shakti
Foundation
Sh. Jaideep Saraswat,
Associate Director, Vasudha foundation
Dr. Probal Ghosh,
Associate Director, IRADe
Sh. Rahul Bharti
Sr Executive Director, Maruti Suzuki
Sh. Ashish Chutani
Head Government and Policy Affairs,
Maruti Suzuki
Sh. Nishant Sarna
Sr General Manager, Maruti Suzuki
Sh. Prasad Phadke
Sr Gen Manager, SIAM (Tata Motors)
Ms. Madhura Sekhsaria,
Senior General Manager (PV Strategy),
Tata Motors
Sh. Aakaash Singh,
Dy General Manager (Government &
Public Affair), Tata Motors
Ms. Pamela Tikku,
VP & Head, Public Affairs, Mahindra &
Mahindra
Sh. Alok Verma,
Head of Corporate Strategy & Planning,
Ashok Leyland
Sh. Alok Sharma
Director (R&D), IOCL
Sh. S Lakshminarayanan
ED (SD), IOCL Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport x
Authors and Acknowledgement
Sh. Y.B Ramakrishna
Chairperson, IFGE CBG Producer Forum
Sh. S. Kannan
CGM (Marketing), BPCL
Sh. Baljeet Singh
Director, CHT
Sh. Bibhudatta Rout
GM (AE), IOCL
Sh. K. Vasantha Rao
GM (SD), IOCL
Sh. Vaibhav Pratap Singh
Executive Director, CSI
Sh. Dev Jyoti
Head Infratech, CII
Sh. Komal Sharma
Joint Director (Infrastructure), FICCI
Sh. Varun Gogia
Deputy Director (Logistics), FICCI
Sh. Pramod Sharma,
President Corporate Affairs, Sun Mobility
Sh. Tushar Patil
AVP, Praj Industries Ltd
Sh. Aishwarya Raman
Executive Director, OMI Foundation
Sh. Sanjay Ganjoo
DG, IFGE
Sh. D L N Sastri
Director (Oil, Refining & Marketing), FIPI
Sh. Sharan Singh
Dy. General Manager–Group Public
Affairs, Mahindra & Mahindra Ltd.
Ms. Anupama Kumari
Consultant, NITI Aayog
Sh. Suresh Subramanian
AD, FICCI
Technical Editors
Ms. Aastha Manocha
Editor and Communication Consultant
(Independent)
Ms. Rishu Nigam
Lead Editor and Communication
Consultant (Independent)
Communication and Research &
Networking Division, NITI Aayog
Ms. Anna Roy
Programme Director, Research &
Networking
Sh. Yugal Kishore Joshi
Lead, Communication
Ms. Keerti Tiwari
Director, Communication
Dr. Banusri Velpandian
Senior Specialist, Research and Networking
Ms. Sonia Sachdeva Sharma
Consultant, Communication
Sh. Sanchit Jindal
Assistant Section Officer, Research and
Networking
Sh. Souvik Chongder
Young Professional, Communication
NITI Design Team
NITI Maps & Charts Team Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport xi
Contents
Contents
List of Figuresxiii
List of Tablesxiv
List of Abbreviations xv
Executive Summary xix
1. Introduction and Context..........................................................................................................................1
1.1 A Decade of Growth (2014–2024) 3
1.2 Modal Composition of Mobility 4
1.3 The Dual Imperative: Economic Growth and Environmental Stewardship 5
1.4 Addressing Disparities 6
1.5 Institutional Mechanism: Inter-Ministerial Working Group on Transport 7
2. Transport Sector: Scale, Structure & Growth Drivers......................................................................... 9
2.1 Energy, Emissions and Infrastructure Investment 10
2.1.1 Infrastructure Investment 10
2.2 Transport Demand 13
2.2.1 Modes of Transportation 14
2.3 Alternative Clean Fuels, Technologies and their Trends in Transportation 19
2.3.1 Electric Vehicles 19
2.3.2 Biofuels in Transportation 21
2.3.3 Green Hydrogen and Its Derivatives 23
2.3.4 Natural Gas 24
3. Current Policy Landscape in the Transport Sector.............................................................................27
3.1 Global Trends in Transport Decarbonisation Policy 28
3.2 India’s Transport Sector Policy Interventions 29
3.2.1 Emission & Efficiency Standards 30
3.2.2 Fuel and Technology Transition Policies 31
3.2.3 Infrastructure & Modal Shift Initiatives 34
3.3 Behavioural Nudges for Sustainable Mobility 36
4. Pathways to 2070: Modelling Transport Demand & Energy Use.....................................................39
4.1 Modelling Approaches and Methodology 40
4.1.1 Methodology for Final Energy Demand Estimation of Transport Sector 42 Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport xii
Contents
4.1.2 Passenger and Freight Transport Modelling Approaches 43
4.1.3 Scenarios Compared 44
4.2 Activity Projections and Baseline Estimation 49
4.2.1 Activity demand (BPKM/BTKM) Methodology Projections 49
4.2.2 Estimation of Baseline Transport Demand 50
4.3 Results and Discussion 51
4.3.1 Passenger Transport: Demand and Modal Shift 51
4.3.2 Freight Transport: Demand and Modal Shift 56
4.3.3 Technology Transitions: Electrification, Gas, and Alternative Fuels 60
4.3.4 Transport Energy Demand 63
5. Challenges in the Transport Sector Transition.....................................................................................71
5.1 Accelerating the Clean Mobility Transition 72
5.2 Underutilised Infrastructure and Modal Gaps 73
5.3 Fuel Diversification 74
5.4 Strengthening Regulatory Architecture and Circularity 75
5.5 Public Transport and Modal Integration 75
6. Towards Net Zero Transport: Key Policy Suggestions.......................................................................77
6.1 Reimagining Urban Transport: Sustainability, Integration, and Equity 79
6.2 Future-Ready Freight: Infrastructure, Modal Integration, and Domestic Manufacturing 79
6.3 Strengthening Pipeline Infrastructure for Clean Fuel Transition 80
6.4 Accelerating EV Adoption 81
6.4.1 Strengthen the EV Charging Network 82
6.4.2 Accelerate EV Deployment and Availability of Clean Power 82
6.4.3 Develop a Circular Economy for EV Batteries 83
6.5 Enhancing Energy Efficiency in India’s Transport Sector 83
6.6 Driving the Biofuel Economy: Innovation, Security, and Sustainability 84
6.7 Strengthening Vehicle Retirement and Recycling 84
6.8 Promoting Non-Motorised and Active Transport 85
6.9 Enabling Systemic Transformation: Unified Governance, Digital Infrastructure,
and Policy Innovation 86
7. Conclusion: Charting a Cohesive Path Towards Net Zero Mobility ...............................................89
7.1 A Systemic Shift Rather than Incremental Change: Technology as a Driver 90
7.2 Strategic Policy & Governance Levers 90
7.3 Modelling Insights 91
7.4 An Inclusive and Pragmatic Transition 91
7.5 Enabling the Future: Institutions, Investments & Innovation 91
Annexures...........................................................................................................................................................93
References. ..........................................................................................................................................................97 xiiiScenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport
List of Figures
Figure 1.1Global comparison of GDP/capita vs PKM/capita3
Figure 2.1Growth in investments in public sector from 2004 to 2024 for roads,
railways, waterways and aviation
11
Figure 2.2Modal share of passenger and freight transport for different countries14
Figure 2.3Increasing vehicle ownership since 199015
Figure 2.4Vehicles per 1000 population vis-a-vis GDP/capita for India 15
Figure 2.5Representation of vehicles per 1000 population for developed countries16
Figure 2.6Trend of domestic air passenger traffic18
Figure 2.7Trend of cargo carried by the domestic aviation sector 18
Figure 2.8EV sales penetration (% of new registrations) in India across 2W,
3W and 4W
20
Figure 2.9CNG vehicle sales penetration among LGVs, MGVs, and HGVs 24
Figure 4.1Methodology representation for transport energy and emission estimation
(a) passenger and (b) freight
44
Figure 4.2Historical growth in per capita passenger transport demand (road + rail)
in various countries showing growth followed by saturation
50
Figure 4.3Baseline passenger transport (BPKM) and freight transport (BTKM)
demand estimation (2025)
51
Figure 4.4Projected growth in billion passenger-kilometres (BPKMS) and per-
capita passenger kilometres (PKMS)
52
Figure 4.5Global comparison of GDP/capita vs PKM/capita highlighting that
mobility increases with rising income levels
52
Figure 4.6Modal shift projections of passenger transport under CPS and NZS till
2070
54
Figure 4.7Projected growth in freight demand under CPS and NZS till 2070 56
Figure 4.8Global comparison of freight demand per capita as a function of Income
(GDP per capita)
57
Figure 4.9Modal shift projections of freight transport till 2070 under CPS and NZS
highlighting increase in rail share
59
Figure 4.10Transport energy demand under CPS and NZS until 2070 in Mtoe 64
Figure 4.11Drivers for lower energy use in NZS by 2070 compared to CPS 64
Figure 4.12Biofuel demand under CPS and NZS by 2050 and 207068
CPS: Current Policy Scenario | NZS: Net Zero Scenario xivScenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport
List of Tables
Table E1 Current Policy Scenario (CPS) vs Net Zero Scenario (NZS) – 2050 &
2070
xix
Table 3.1Key policies and standards on vehicle emissions and fuel efficiency30
Table 3.2Key policies and programs enabling fuel transition in transport sector31
Table 3.3Key policies and programs to promote electrification in transport
sector
33
Table 3.4Key policies and initiatives for transport infrastructure planning35
Table 3.5Behavioural nudges and interventions for promoting sustainable
mobility choices
37
Table 4.1Summary of key indicators in CPS and NZS till 2050 and 2070 44
Table 4.2Modal share–road transport projections under CPS & NZS, 2070 55
Table 4.3Vehicle ownership projections56
Table 4.4Freight vehicle ownership projections 2070 (per 1000 population)60
Table 4.5xEV Penetration projections on annual sales for passenger & freight
vehicles till 2070 for CPS and NZS
61
Table 4.6Projections of fuel demand under CPS and NZS by 2050 & 2070 66
Table 6.1At a glance: Pathways for an efficient transport transition 78
CPS: Current Policy Scenario | NZS: Net Zero Scenario xvScenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport
List of Abbreviations
AAM Activity Analysis Module
ACC Advanced Chemistry Cell
AMRUT Atal Mission for Rejuvination and Urban Transformation
ASIF Activity, Structure, Intensity, and Fuel
ATF Aviation Turbine Fuel
ATJ Alcohol-to-Jet
BaaS Battery-as-a-Service
BEE Bureau of Energy Efficiency
BPKMs Billion Passenger-Kilometres
BRT Bus Rapid Transit
BSBharat Stage
BTKMs Billion Tonne-Kilometres
CAFE Corporate Average Fuel Efficiency
CBG Compressed Bio-Gas
CBO CBG Blending Obligation
CGE Computational General Equilibrium
CNG Compressed Natural Gas
CORSIA Carbon Offsetting and Reduction Scheme for International Aviation
CPS Current Policy Scenario
CVConventional Vehicle
DFC Dedicated Freight Corridor
DPI Digital Public Infrastructure
DRDO Defence Research and Development Organisation
ELV End-of-Life Vehicle
EPR Extended Producer Responsibility
EVElectric Vehicle
FAME Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles
FAR Floor Area Ratio Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport xvi
List of Abbreviations
FCV Fuel Cell Vehicle
FOFuel Oil
FT / FT-SYN Fischer-Tropsch (Synthesis)
GCAM Global Change Analysis Model
GHG Greenhouse Gas
GQGolden Quadrilateral
HCV Heavy Commercial Vehicle
HDV Heavy-Duty Vehicle
HEFA Hydroprocessed Esters and Fatty Acids
HSD High Speed Diesel
HSR High-Speed Rail
ICAO International Civil Aviation Organization
ICCT International Council on Clean Transportation
ICE Internal Combustion Engine
ICM India Carbon Market
IEM India Emission Model
IESS Indian Energy Security Scenarios
INR Indian Rupee
IRIndian Railways
ITS Intelligent Transport System
IUDX India Urban Data Exchange
IWT Inland Water Transport
LEAP Low Emissions Analysis Platform
LNG Liquefied Natural Gas
LPG Liquefied Petroleum Gas
MIDC Modified Indian Driving Cycle
MMLP Multi-Modal Logistics Park
MMT Megatonne / Million Metric Tonnes
MTPA Million Tonnes Per Annum
MoCA Ministry of Civil Aviation
MoEFCC Ministry of Environment, Forest & Climate Change
MoPNG Ministry of Petroleum & Natural Gas
MoPSW Ministry of Ports, Shipping & Waterways
MoRTH Ministry of Road, Transport and Highways
MRO Maintenance, Repair & Overhaul Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport xvii
List of Abbreviations
MSMotor Spirit (petrol)
MtCO₂e Million tonnes of CO₂ equivalent
Mtoe Million tonnes of oil equivalent
NDC Nationally Determined Contribution
NITI National Institution for Transforming India
NMT Non-Motorised Transport
NUTP National Urban Transport Policy
NZS Net Zero Scenario
OMCs Oil Marketing Companies
PASTA Policy Ambition and Sustainable Transport Assessment
PLI Production-Linked Incentive
PM E-DRIVE PM Electric Drive Revolution in Innovative Vehicle Enhancement
PPP Public-Private Partnership
PtL Power-to-Liquid
PtX Power-to-X
RERenewable Energy
RMI Rocky Mountain Institute
RRTS Regional Rapid Transit System
SAF Sustainable Aviation Fuel
SATAT Sustainable Alternative Towards Affordable Transportation
SEZ Special Economic Zone
SIAM Society of Indian Automobile Manufacturers
STUs State Transport Undertakings
TOD Transit-Oriented Development
TCO Total Cost of Ownership
TIMES The Integrated MARKAL EFOM System
UEI Unified Energy Interface
UPI Unified Payments Interface
VGF Viability Gap Funding
WEF World Economic Forum
WLTP Worldwide Harmonised Light Vehicles Test Procedure
xEV
Electrified vehicles (generic term for all types of electric vehicles i.e.,
Battery EV, Strong Hybrid EV, Range Extender EV, Plug-in Hybrid EV) xixScenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport
Executive Summary
The transport sector is one of the key drivers of India’s economy. It also contributes significantly
to the country’s energy use and emissions, accounting for 20% of final energy demand and
around 10% of greenhouse gas (GHG) emissions in year 2020. As India urbanises rapidly and
travel demand surges, the sector risks being locked into higher fuel imports, poorer air quality,
and rising logistics costs. Decarbonising transport through modal shift, zero-emission vehicles
(ZEVs), and clean fuels & technologies is therefore critical to meet India’s Net Zero 2070 goal.
Modelling Approach
For this study on Net Zero pathways for the transport sector, NITI Aayog’s Inter-Ministerial
Working Group developed two robust modelling pathways to 2070. The modelling applies the
Activity Structure Intensity Fuel (ASIF) framework through the tools including India Energy
Security Scenarios (IESS) and The Integrated MARKAL-EFOM System (TIMES) to estimate
transport demand and technology transition upto 2070. The models integrate data on modal share,
vehicle stock, technology stack and fuel efficiency, while reflecting the impact of ongoing national
programmes such as Dedicated Freight Corridors (DFCs), metro expansion, and rail modernisation.
The analysis of energy demand to 2070 is based on two scenarios: a Current Policy Scenario (CPS)
reflecting business-as-usual, and a Net Zero Scenario (NZS) aligned with India’s 2070 target.
Deep decarbonisation is feasible, front-loaded, and visible in the comparative
outcomes
By 2070, transport energy demand falls to about 200 million tonnes of oil equivalent (Mtoe)
under Net Zero Scenario (NZS), around 40% lower than the 336 Mtoe projected under Current
Policy Scenario (CPS). This decline stems from near-universal adoption of Zero-Emission
Vehicles (ZEVs) in road transport, a structural shift towards public and shared transport,
increased rail and waterways freight, and more compact, efficient urban development.
Fuel mix is decisively rebalanced from oil-heavy to clean fuels
Under Current Policy Scenario (CPS), petroleum accounts for majority of the 2070 transport
energy mix. Under Net Zero Scenario (NZS), its share falls to around 21%, with demand
met majorly through electricity, biofuels, and green hydrogen. Electricity’s share more than
doubles between 2050 and 2070, biofuels expand to about one-fourth, and hydrogen emerges Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport xx
Executive Summary
as a major carrier for long-haul freight, shipping, and aviation. Natural gas plays a key role
under CPS but the share is taken by Bio-CNG by 2070 in NZS.
Mobility structure shifts toward mass, shared, and rail transport
By 2070, public and shared modes account for around 60% of passenger trips under Net Zero
Scenario (NZS), (vs 50% in (CPS). Passenger rail’s share rises to 25% under NZS (from 20% in
CPS), while freight rail expands to 30% (from 25% in CPS). Private car ownership stabilises around
200 vehicles per 1,000 people under NZS, compared to 250 under Current Policy Scenario (CPS).
Macro dividends are large and enduring
Net Zero Scenario (NZS) lowers oil imports and price-shock vulnerability, improves air quality
and health gains, and seeds new clean-transport industries (batteries, chargers, electrolyzers
and recycling), creating jobs and industrial capacity across manufacturing and services.
Indicator snapshot - Current Policy Scenario vs Net Zero Scenario
Table E1: Current Policy Scenario vs Net Zero Scenario – 2050 & 2070
Indicator Current
Current Policy
Scenario
Net Zero
Scenario
2050 2070 2050 2070
Passenger Kilometres per Capita 3950 12200 14000 1100012000
Tonne Kilometres per Capita 2920 8200 10000 6500 8000
Modal Share
Passenger
Road 78% 73% 70% 69% 64%
Metro<1% 2% 2% 2% 3%
Rail 17% 19% 20% 22% 25%
Air4% 7% 8% 7% 8%
Freight
Road66% 67% 65% 63% 60%
Rail 22% 24% 25% 27% 30%
Air<1% <1% <1% <1% <1%
Waterways 8% 7% 7% 8% 8%
Pipelines 3.60% 2% 2% 2% 2%
Road Transport
Public Share (Taxi,
3-Wheelers)
47% 49% 50% 54% 60%
Energy and Fuel Usage
Overall Energy Demand (Mtoe) 137 335 307 250 192
Passenger Transport Energy Demand
(Mtoe)
74 168 152 125 110
Freight Transport Energy Demand (Mtoe)63 167 155 125 82 Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport xxi
Executive Summary
Petroleum use86% 61% 46% 49% 21%
Electricity use2% 14% 24% 19% 45%
Biofuels use (Ethanol, Biodiesel,
Sustainable Aviation Fuel (SAF))
4% 7% 8% 13% 20%
Gas use (Natural gas/ CBG(Compressed
Bio-Gas)/ GH2)
8% 18% 22% 17% 10%
i
GH2 based ammonia & e-methanol for
shipping
- - - 1% 4%
Vehicle Ownership (Cars per 1,000
Population)
32 170 250 130 200
Investment Requirement (2026–2070)*USD 3.44 trillion USD 4.3 trillion
* Refer Report on Financing Needs (Vol. 9)
Conclusion
Net Zero Scenario delivers a systemic transformation with lower total energy use, a
predominantly clean fuel mix, and mobility patterns that ensure equal or better access with
fewer private vehicles.
Key Challenges
While technically feasible, India’s Net Zero transport pathway faces several systemic barriers
that could raise transition costs, prolong petroleum dependence, and delay socio-economic
gains. Public charging infrastructure remains sparse, around 17 chargers per million people,
particularly for buses and trucks. High upfront EV costs and reliance on imported cells, critical
minerals, and electronic components expose mobility to supply-chain risks. Road transport
continues to dominate (78% of passengers, 66% of freight), while rail and waterways are
underutilised due to connectivity and governance gaps. Fragmented institutional policies, and
slow coordination on Zero-Emission Vehicles (ZEVs), Transit-Oriented Development (TOD),
freight corridors, and clean-fuel policies, limits scalability and systemwide impact. Vehicle
and battery recycling systems remain nascent, risking material losses and environmental harm
as electrification scales.
Policy Suggestions / Levers
A. Accelerate ZEVs & Supporting Infrastructure
i. Adoption of Zero-Emission Vehicles (ZEVs) including Battery Electric Vehicles
(BEVs), hydrogen based vehicles, Biofuels (Ethanol based Flex Fuel Vehicles (FFVs)
and Compressed Bio-Gas (CBG) based vehicles) should be kept as key priority
for the long term vision and accordingly fomalise segment-wise ZEV acceleration
i consists only clean fuels Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport xxii
Executive Summary
through 2035 for two-/three-wheelers, passenger cars, buses, and trucks.
ii. Expand public and corridor-based charging and swapping infrastructure with safety
and interoperability standards. Enforce EV-ready building codes, enable smart
charging via metering, time-of-day pricing, and vehicle-to-grid (V2G) integration
through the Unified Energy Interface (UEI).
iii. Prioritise high-utilisation fleets- buses, taxis, and logistics vehicles through aggregated
procurement, Renewable Energy Services Company (RESCO) models, and corridor
electrification. Strengthen domestic manufacturing of batteries, cells, and power
electronics with Production Linked Incentive (PLI) backed supply chains to secure
competitiveness and local value creation.
The transition strategy should begin with the phased elimination of polluting diesel vehicles
and the adoption of lower-emission technologies such as CNG, hybrids, and electric vehicles.
The subsequent phase should advance with the use of biofuels through FFVs, high Bio-CNG
blends, and hybrid FFV models, alongside continued growth in EV adoption. The final phase
should ensure full deployment of Zero-Emission Vehicles (ZEVs) such as EVs, hydrogen
based vehicles, FFVs, and CBG-based models. To drive this transition, set segment-specific
targets with clear timelines and compliance mechanisms across all vehicle segments.
B. Promote Modal Rebalancing and Freight Efficiency
i. Expand metro, Regional Rapid Transit System (RRTS), and bus networks with strong
last-mile connectivity, and formalised paratransit integration.
ii. Encourage Transit-Oriented Development (TOD) and premium bus services.
iii. Shift freight to cleaner modes by achieving rail targets unit clarity-MMT, expanding
inland waterways, coastal shipping and multimodal logistic parks (MMLPs),
supported by Dedicated Freight Corridors (DFCs) and seamless trans-shipment.
iv. Use congestion and parking pricing, alongside safe walking and cycling networks,
to reduce dependence on private vehicles and road freight.
C. Advancing Clean-Fuel Diversity and Decarbonising Aviation and Shipping
i. Scale sustainable biofuels and Sustainable Aviation Fuel (SAF) production with
blending infrastructure for ethanol, biodiesel, and Compressed Bio-Gas (CBG) under
clear sustainability standards.
ii. Develop a national roadmap for green hydrogen and e-fuels, focusing on heavy-duty
transport, shipping, and aviation.
iii. Promote methanol, ammonia, and synthetic fuels for hard-to-electrify segments.
iv. Future-proof gas and petroleum pipeline networks to be hydrogen- and biofuel-
compatible, integrate CBG into city gas distribution and explore slurry pipelines for
bulk materials transportation. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport xxiii
Executive Summary
D. Strengthening Governance, Circularity, and Financing
i. Establish Unified Metropolitan Transport Authorities (UMTAs) in major cities
with Digital Public Infrastructure (DPI) and open-data systems like Unified Energy
Interface (UEI) and IUDX (India Urban Data Exchange) for coordination and
transparency.
ii. Leverage the India Carbon Market (ICM) to finance low-carbon mobility.
iii. Promote vehicle and battery circularity through state-level End-of-Life Vehicles
(ELV) policies, PPP-based scrappage facilities, and traceable recycling systems (e.g.
‘Battery Aadhaar’).
iv. Raise efficiency and performance through Corporate Average Fuel Efficiency
(CAFE) norms, Bharat Stage standards, lightweight design, and strict maintenance
enforcement to ensure technology-neutral competition.
Investment Needs and Co-benefits
Implementing the Net Zero pathway requires about USD 4.3 trillion in cumulative investment
till 2070, around 25% higher than the USD 3.44 trillion under Current Policy pathway. This
additional investment, however, is a strategic opportunity than a cost burden. It yields enduring
benefits through lower fuel imports, improved air quality and health outcomes, greater energy
security, and robust industrial and employment growth in batteries, charging, hydrogen, and
recycling. Early investment in electrification, biofuels, and hydrogen insulates India from
global fuel volatility and positions the country as a global leader in clean transport technology.
Way Forward / Strategic Priorities
The next decade will determine whether India’s transport transition achieves its full potential.
Turning the Net Zero pathway into a delivery plan requires coordinated action across
government, industry, and finance. Clear targets on Zero-Emission Vehicles (ZEVs) and
clean-fuel penetration for 2025–2035, backed by funded central and state plans, can create
investment certainty. Rapid deployment of charging and swapping networks, hydrogen pilots
for buses and freight, and the expansion of DFCs, MMLPs, and waterways will be pivotal.
Further, supportive policies should be adopted to create an enabling ecosystem, including
charging infrastructure and CNG–CBG synchronisation through pipeline infrastructure.
Domestic supply chains for EVs, fuel cells, and hydrogen systems underpinned by Extended
Producer Responsibility (EPR) and recycling frameworks will build resilience and circularity.
Finally, unified governance through UMTAs, DPI, and UEI/IUDX, combined with milestone
reviews in 2030, 2035, and 2047, will ensure accountability and adaptive course correction. 1
INTRODUCTION
AND CONTEXT 2Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport
Introduction and
Context
1
Introduction: A Strategic Imperative
India stands at a critical juncture in its development, marked by rapid urbanization, economic
expansion, and rising aspirations for mobility and logistics services. The transport sector
plays a foundational role in enabling this transformation, serving as a catalyst for regional
integration, industrial competitiveness, and social inclusion. Given India’s vast geography,
spanning 3.28 million square kilometres and a population of over 1.4 billion, mobility is not
merely a logistical requirement but a strategic necessity.
Mobility is both a barometer and a driver of economic development. The relationship between
per capita passenger kilometres (PKMs) and prosperity is evident across global economies:
advanced nations such as Germany, Japan, and the United Kingdom consistently register
per capita PKM levels exceeding 11,000, reflecting the strong correlation between mobility
demand and GDP per capita (Figure 1.1). This pattern illustrates how higher incomes enable
greater travel capacity and vice versa. In contrast, India in 2023 recorded an average annual
travel of 4,273 km per capita annually (up from 3,483 km in 2000). While this figure is modest
in global terms, it represents a significant cumulative national footprint due to the scale of
India’s population, already surpassing many developed countries in aggregate mobility.
Efficient mobility systems expand access to education, employment, and markets. High PKM
levels also correlate with productivity, urban efficiency, and reduced regional disparities.
Mobility, thus, is not just an economic service, it is the circulatory system of national growth.
As of 2022–23, the transport sector accounts for about 4.5% of India’s Gross Value Added.
1 Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 3
Introduction and Context
Australia
France
Germany
Spain
Japan
Italy
United Kingdom
United States
Thailand
Vietnam
India (2023)
0
5,000
10,000
15,000
20,000
25,000
0 10,00020,00030,00040,00050,00060,00070,00080,000
Passenger Kilometres (PKM) per Capita
GDP Per Capita, PPP (constant 2021 Int'l $)
Figure 1.1: Global comparison of GDP/capita vs Passenger Kilometres (PKM) per capita
Source: World Bank, OECD
2
1.1 A Decade of Growth (2014–2024)
India’s transport sector witnessed significant progress in the last 10 years:
Railways: Over 31,000 km of new tracks and 45,000 route km were electrified. The
Dedicated Freight Corridors (DFCs) are 90% operational and have cut transit times
by up to 40%. Passenger services were boosted with 68 Vande Bharat trains and
modernisation of 1,000 Amrit stations. In addition, 77 Gati Shakti cargo terminals
enhanced freight operations.
3
Roadways: The road network expanded to 6.7 million km. National Highways grew
by 60% from 91,287 km in 2014 to 146,145 km in 2023. The pace of highway
construction also increased by 143% to 28.3 km/day.
4
Supported by the Bharatmala
Pariyojana, the road freight market crossed USD 150 billion.
Rural Access: PM Gram Sadak Yojana connected 1,63,000 habitations, improving
last-mile connectivity and boosting non-farm incomes.
5
Ports and Shipping: Under Sagarmala, cargo capacity rose from 581 million metric
tonnes (MMT) to 855 MMT and container traffic went from 7.9 million twenty-foot
equivalent unit (TEUs) to 13.5 million TEUs.
6
Major port revenues doubled to INR
24,203 crore in FY 2024-25.
Aviation: Passenger volumes rose from 10.4 crore to 22 crore.
7
UDAN (Ude Desh
ka Aam Nagrik) operationalised 619 routes and 88 airports.
8
Air cargo reached Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 4
Introduction and Context
8 MMT with 80 airports run on 100% renewable energy. In November 2024, India
recorded a daily peak of five lakh domestic passengers.
9
Pipelines: The operational natural gas pipeline network has expanded from about
15,340 km in 2014 to roughly 25,000 km by 2024, with a further 10,000 km under
construction. Over the same period, crude oil and petroleum product pipelines have
also grown to around 10,500 km and 24,000 km respectively, making pipelines the
dominant mode for long‑distance liquid fuel transport.
10
Further, India undertook
various policy interventions such as “One Nation, One Grid”, unified transportation
tariff, etc, to improve logistics efficiency of the network
1.2 Modal Composition of Mobility
Despite efforts toward multimodality, as of 2025, India’s transport mix currently remains
significantly skewed in favour of road transport. However, with continued focus on enhancing
multimodality, a growing shift from road to other efficient modes is envisaged.
Passenger traffic: Roads account for ~78%, rail ~17%, air 4%, and metro accounts
for 1% of all traffic.
Freight traffic: Roadways carry 66%, railways 22%, waterways 8%, pipelines 4%,
and air only 0.06% of all freight traffic in the country.
This imbalance results in higher energy use, logistical costs, and emissions, particularly
compared to more efficient and sustainable modes like rail and inland waterways. For context,
while waterways account for ~25% of freight movement in China, in India it is only ~8%.
Meanwhile, in the EU overall, maritime freight accounts for more than two-thirds (67.4%) of
freight transport tonne-kilometres.
11
India can correct this imbalance by leveraging its underutilised natural transport assets such
as its 7,517 km coastline and 14,500 km of navigable waterways. Programmes like Sagarmala
seek to modernise ports and coastal infrastructure to reduce logistics costs. The upcoming
Vadhvan Port in Palghar, Maharashtra, for example, is expected to cut freight costs by 25%
for Northern and Western India, while decongesting the Jawaharlal Nehru Port (JNPT) in
Raigad. The Eastern Waterways Grid, which links Kolkata with Myanmar, is also creating
new corridors for the North-East.
Strategically linking mineral-rich states (like Chhattisgarh, Odisha, and Jharkhand) and
agriculturally productive regions (such as Uttar Pradesh, Punjab, and Madhya Pradesh) by
industrial corridors and ports through road, rail, pipelines, and waterways can catalyse new
growth zones. These include special economic zones (SEZs), inland logistics hubs, and rural Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 5
Introduction and Context
manufacturing clusters, all of which are critical to correcting regional imbalances and achieving
equitable growth.
Given the evolving economic landscape and rising mobility demands, the path forward lies in
leapfrogging conventional, siloed transport planning. India must craft a future-ready paradigm
that is multimodal, clean, inclusive, and digitally enabled, tapping all modes efficiently while
reducing overreliance on roads.
1.3 The Dual Imperative: Economic Growth and Environmental
Stewardship
India’s expanding mobility should sit at the intersection of two major national goals: rapid
economic development and environmental sustainability. Below is a snapshot of the current
scenario:
a. Lagging Mobility Metrics Amidst Rising Aspirations: India’s passenger kilometres
and tonne kilometres are rising but still lag behind global benchmarks. Heavy reliance
on private vehicles due to inadequate public transport leads to congestion, increased
fuel consumption, and inequality. Road freight dominates despite being costlier and
more polluting.
b. Infrastructure Modernization: Programs like Bharatmala, Sagarmala, and Gati
Shakti are modernising India’s multimodal transport grid with new highways, metro
systems, electric buses, and logistics corridors.
c. Hidden Costs: Emissions from the transport sector account for about 10% of overall
GHG emissions in the country in 2020, with road transport contributing around 90%
of the transport sector emissions. Rising motorisation brings with it air pollution,
traffic congestion, and higher crude oil imports that are already over 87% of total
supply. Electric mobility brings its own dependencies, especially on imported lithium
and battery components, and India’s coal-heavy power grid adds further complexity.
d. Urbanisation and Opportunity to Rethink Travel: With urbanisation projected to
rise from the current 36% to over 65% by 2070, cities must evolve through Transit-
Oriented Development (TOD) that is compact, connected urban zones that reduce
the need to travel long distances. Similarly, aligning industrial hubs with rail and
port hubs can cut freight distances and energy use.
e. Coordinated Governance: India’s transport governance involves numerous
specialised ministries. Enhanced coordination among roadways, railways, ports,
aviation, power, and urban planning bodies is essential to create integrated, efficient,
and sustainable mobility systems. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 6
Introduction and Context
f. Manufacturing and Mobility are Closely Interlinked: Manufacturing drives
demand for vehicles, fuels, and logistics, while requiring an efficient freight systems
to stay competitive. India’s logistics costs are quoted at 13–14% of GDP, versus
8–10% in China and the EU.
12
The first official assessment now estimates logistics
costs at 7.97% of GDP (₹24.01 lakh crore) in 2023–24, broadly aligning India with
advanced‑economy benchmarks. PM Gati Shakti and National Logistics Policy (2022)
aim to consolidate and deepen these gains by keeping logistics costs comparable to
global benchmarks i.e., 8% of GDP while improving service quality and multimodal
connectivity across road, rail, ports, and waterways
13
. Given that the automobile
industry contributes about 7.1% to the national GDP and nearly half of manufacturing
GDP, efficient and low‑carbon logistics will be critical as e‑commerce, industrial
output, and urbanisation sharply increase freight demand.
India’s Singularity: Challenges & Contextual Realities
8High Population Density and Urban Congestion: Unlike many developed nations,
India must decarbonise while managing high urban density, informal transit systems,
and affordability constraints.
8Two-Wheeler Dominance: India’s mobility is uniquely two-wheeler heavy - posing
both a challenge for electrification and an opportunity for rapid EV penetration in
cost-sensitive segments.
8Transition Risks: The shift from oil to critical minerals (e.g., lithium, cobalt) introduces
new dependencies. India must invest in battery recycling, alternative chemistries, and
secure supply chains.
8Regional Disparities: The North-East, Himalayan, and tribal regions face unique
connectivity and terrain challenges, requiring tailored, resilient, and inclusive mobility
solutions.
8Behavioural and Cultural Factors: Vehicle ownership is often aspirational. Shifting
mindsets toward shared, public and Non-Motorised Transport (NMT) will require
sustained behavioural nudges and urban design reforms.
1.4 Addressing Disparities
Disparities in access to transport services persist across geographies and demographics, often
limiting participation in the growth story. National averages on transport performance often
mask deep-rooted disparities in access, affordability, and opportunity — especially in rural
areas, socio-economically disadvantaged groups, and remote geographies. Bridging these
mobility gaps is a prerequisite for achieving resilient and sustainable transport systems. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 7
Introduction and Context
Beneath national averages lie sharp disparities:
Access to Public Transport: Low-income households, especially in rural and peri-
urban areas, lack access to affordable transport.
Geographic Barriers: India’s north-eastern and Himalayan regions face unique
topographic and infrastructure development challenges.
14
Aspirational Mobility: With India’s low car ownership of around 33 cars per 1,000
people, cars are still an aspirational commodity for most households. Bridging
affordability barriers for marginal segments is therefore critical, particularly
as first‑time buyers look to upgrade from two‑wheelers. The opportunity lies in
deliberately promoting smaller, affordable cars for these first‑time buyers, which can
provide significant co‑benefits in terms of higher fuel efficiency, lower emissions,
and reduced pressure on traffic and parking.
A truly transformative mobility vision must be rooted in equity, ensuring that no region or
group is left behind. For example, in Bhubaneswar, the Mo Bus and complementary Mo E-Ride
electric rickshaw feeder services, designed as part of an integrated, gender-responsive transport
network, significantly expanded safe and affordable mobility for women and transgender
commuters.
15
An inclusive transport strategy, thus, must ensure affordability, accessibility, and
coverage for all communities.
Achieving Net Zero by 2070 is a formidable task, but with strategic planning, international
collaboration, affordable finance, and broad participation from government, industry, and
communities, India’s transport sector transition can set a benchmark for emerging economies.
1.5 Institutional Mechanism: Inter-Ministerial Working Group on
Transport
The Inter-Ministerial Working Group (IMWG) on Transport is among the several Inter-
Ministerial WGs constituted by NITI Aayog to chart out a development vision aligned with
India’s commitment to become a Net Zero Emission nation by 2070.
This effort involves multiple working groups tasked with assessing long-term transition
pathways across key domains, macroeconomic aspects of transition, sectoral transformations
(transport, power, industry, buildings, and agriculture), climate finance (mitigation and
adaptation), critical minerals, R&D and manufacturing, and the social implications of transition.
The Inter-Ministerial Working Group on Transport has been mandated to assess the current state
of India’s mobility ecosystem, spanning passenger and freight demand, modal composition,
technological maturity and to recommend a comprehensive transition pathway through 2070. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 8
Introduction and Context
This vision must balance growth with environmental responsibility, while ensuring that
mobility remains accessible, affordable, and equitable. The composition of the committee
was as follows:
Chaired by: Dr. Anil Jain, Chairperson, Petroleum and Natural Gas Regulatory Board
(PNGRB)
Composition:
Representatives from Ministries/Departments: Road Transport & Highways,
Railways, Civil Aviation, Power, New & Renewable Energy, Petroleum & Natural
Gas, Ports Shipping & Waterways, Heavy Industry, MSME, and Bureau of Energy
Efficiency (BEE)
Industry and knowledge partners: Society of Indian Automobile Manufacturers
(SIAM), ICCT, RMI India, and TERI
To achieve this, the Working Group has:
Analysed transport demand driven by GDP growth across passenger and freight
segments
Examined the impact of modal shifts (private to public transport/ motorised to non-
motorised, etc.) on emissions.
Recommended pathways for accelerated adoption of clean fuels & technologies
(EVs, hybrids, biofuels, hydrogen, etc.)
Examined scope and policies for shifting to energy-efficient modes such as rail and
waterways
Examined the role of behavioural nudges in accelerating shift to sustainable mobility
solutions.
Explored financing instruments and incentive structures to scale green transport
infrastructure 2
TRANSPORT
SECTOR: SCALE,
STRUCTURE &
GROWTH DRIVERS 10Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport
2
Transport Sector:
Scale, Structure &
Growth Drivers
Transport is the backbone of India’s growth story: connecting workers to jobs, firms to
markets, and regions to each other at unprecedented scale. Every additional highway lane,
metro corridor, freight train and flight route has helped compress distance and time, supporting
economic expansion, urbanisation and rising incomes. Yet this very success has also driven
rapid growth in energy use and emissions. As India prepares for the next phase of development,
understanding the scale, structure and growth drivers of its transport sector is essential: it
reveals where demand is coming from, how different modes share the load, and which policy,
technology and investment choices can steer this engine of growth onto a low-carbon path.
2.1 Energy, Emissions and Infrastructure Investment
Globally, emissions from the transportation sector, as well as its proportion of total energy use,
have steadily increased over the past several decades. This sector accounts for almost 23% of
global CO
2
16. In India, the transport sector accounted for 10% of the total GHG emissions in
2020, while it contributed to 20% of final energy use.
2.1.1 Infrastructure Investment
As India’s economy continues to grow rapidly, the demand for logistics and transportation
infrastructure will rise, opening opportunities for investments in efficient and cost-effective
solutions. The current high cost of logistics underscores the potential for transformative
investments in the sector. Over the years, India has scaled up public investment in transport
infrastructure, supporting projects like the Golden Quadrilateral, Dedicated Freight Corridors,
and Mass Rapid Transport System to enhance connectivity and efficiency. Significant
investments have also been directed toward railways, aviation, and waterways, reflecting the
government’s commitment to a multi-modal transportation approach (Figure 2.1). Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 11
Transport Sector: Scale, Structure & Growth Drivers
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2004-05 2014-15 2024-25
Budget (INR Crore)
Aviation Ports, Shipping and Waterways
2004-05 2014-15 2024-25
Budget (INR Crore)
Road Railway
0
50,000
1,00,000
1,50,000
2,00,000
2,50,000
3,00,000
Figure 2.1: Growth in investments in public sector from 2004 to 2024 for roads, railways,
waterways and aviation
Source: Union Budget
17
Unlocking Scale: The Role of Public-Private Partnerships in India’s
Transport Transformation
Transforming India’s transport through metro expansion, logistics corridors, expressways,
multimodal parks, and clean mobility systems demand sustained, long-term capital flows that
far exceed public budgets.
This necessitates options such as Public-Private Partnerships (PPPs) that offer a catalytic pathway
to blend public intent with private investment and innovation, ensuring timely execution, cost
efficiency, and lifecycle asset management. Delhi, Mumbai, Hyderabad, and Bengaluru airports
are some examples of successful PPP models in the aviation sector.
PPPs enable de-risked, high-impact investments in EV infrastructure, smart urban transit, and
climate-resilient logistics, which are critical components of India’s Net Zero emissions and goal
of a Viksit Bharat by 2047.
To successfully execute PPP models, India should continue to foster transparent regulatory
regimes, bankable project pipelines, and fair risk allocation frameworks that attract institutional
and private capital at scale. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 12
Transport Sector: Scale, Structure & Growth Drivers
Golden Quadrilateral: Transforming India’s Mobility and Growth
The 2001 National Highways Development Project, particularly the Golden Quadrilateral (GQ)
marked a pivotal moment in Indian mobility by slashing travel times, cutting transport costs, and
unlocking economic momentum. Districts within 10 km of the GQ network saw manufacturing
output surge by nearly 49% in the years following its implementation, and substantial annual
savings were achieved in fuel and vehicle maintenance. These infrastructure gains spurred trade
and GDP growth.
18
By 2020, vehicle ownership rose to 242 per 1,000 as GDP per capita surpassed
INR 1,00,000. The 2017 Bharatmala Pariyojana continues this momentum, targeting 65,000 km of
road corridors to enhance connectivity, reduce logistics costs, and support economic expansion.
19
Transit-Oriented Development
Transit-Oriented Development (TOD) is a sustainable urban planning approach that integrates
land use and public transportation to create compact, walkable communities. Centred around
high-capacity transit systems such as suburban railway system, circular rail, metro, light rail,
or bus rapid transit, TOD promotes mixed-use development, reducing dependency on private
vehicles while enhancing accessibility and liveability.
While GDP growth drives transport infrastructure, unplanned expansion exacerbates congestion
and pollution. TOD aligns growth with mobility planning, as seen in metro projects in Delhi,
Bengaluru, and Mumbai. It promotes compact, walkable cities that cut emissions and boost
productivity. Satellite cities like Navi Mumbai and Noida are seen to ease urban pressure
with planned layouts, green infrastructure, and strong transit links, supporting balanced and
sustainable regional growth.
The USA Experience
India’s challenges are not unique. Countries like the United States faced similar issues during
periods of rapid economic growth.
Transit-Oriented Development (TOD) in cities like Denver and Portland successfully
integrated land-use planning with transportation, promoting mixed-use development
around transit hubs. This reduced reliance on private vehicles, curtailed emissions, and
fostered urban growth in sustainable ways. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 13
Transport Sector: Scale, Structure & Growth Drivers
Japan: Efficient Urban Planning and Rail Networks
Japan’s cities, such as Tokyo and Osaka, exemplify the success of TOD. Their dense
urban centres are organised around extensive rail networks such as the Tokyo Metro
and Japan Railways. Mixed-use developments around stations integrate residential,
commercial, and recreational spaces, significantly reducing dependence on private
vehicles.
India can draw valuable lessons from such examples to devise actionable policies tailored to its
unique demographic and economic contexts.
2.2 Transport Demand
In 2025, total passenger travel was estimated at 6,410 billion passenger-kilometres (BPKMs),
with road transport accounting for 78%. Rail followed at 17%, while air travel and metro
systems contributed 4% and 1%, respectively.
Freight transport too displayed a similar trend, with a total of 4,661 BTKMs of which roadways
carried 66% of the freight, rail carried 22%, and waterways 8%. Pipelines accounted for
3.6%, while air freight remained negligible at 0.06% of the total. These figures indicate that
a large share of passenger and freight movement currently takes place through road-based
transport, while railways continue to play a significant and dependable role in the nation’s
transport ecosystem. Rail remains the largest mode of public transport and a crucial backbone
for long-distance and bulk freight movement. The potential of waterways and pipelines in the
transport mix is unrealised. Figure 2.2 highlights that road transport remains the dominant
mode globally. Countries with stronger rail and waterways share long-term efficiency of
diversified modal system. India should aspire to strengthen rail and waterways to reduce
over-dependence on road transport.
Multi-Modal Transport Network Initiative
The PM Gati Shakti initiative is the cornerstone of India’s efforts to advance its multimodal
transportation network to enhance logistics efficiency and support economic growth. Under the
initiative, 434 projects have been identified, totalling an investment of INR 11.17 lakh crore.
This initiative aims to bolster multimodal connectivity and streamline logistics operations. The
development of Multimodal Logistics Parks (MMLPs) is central to this strategy. These large-scale
facilities integrate transportation by road, rail, air, and sea into unified hubs, facilitating efficient
cargo movement. The first MMLP is being developed in Jogighopa, Assam, to serve as a key
logistics centre for India’s northeastern region and neighbouring countries. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 14
Transport Sector: Scale, Structure & Growth Drivers
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
19902019199020191990201919902019
Germany France United
State s
Japan
Modal Share (Passeng er)
Road Rail
*only includes r oad & rail
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
19902019199020191990201919902019
Germany France United
State s
Japan
Modal Share (Freight)
Road Rail Wate rways Pipeline
Figure 2.2: Modal share of passenger and freight transport for different countries
Source- OECD
20
2.2.1 Modes of Transportation
Road
Road transport is India’s dominant mode for passenger and freight movement, supported by
over 63 lakh km of roads in 2022, including approximately 1.46 lakh kilometres of National
Highways
21
. India has one of the world’s largest road networks in the world.
India had 391.07 million registered vehicles as of 31 March 2025, of which 356.22 million
(91.1%) were personal vehicles and 34.86 million (8.9%) were commercial vehicles. Total
registrations have increased 15 times since 1990; driven by sustained economic growth,
rapid urbanization, population increase, improved roads and infrastructure, expansion of
the automobile industry, and easier access to vehicle finance, total registrations have risen
nearly 15-fold since 1991. Two-wheelers dominate the composition, rising from 14.2 million
registrations in 1991 to 286.75 million in 2025, while cars, jeeps, and taxis grew from 2.95
million to 56.3 million over the same period (Figure 2.3).
22 Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 15
Transport Sector: Scale, Structure & Growth Drivers
0
50
100
150
200
250
300
350
400
450
1990 1995 2000 2005 2010 2015 2020 2025
(in million vehicles)
Total Vehicles Registered
2Ws Cars, Jeeps & Taxis Buses Goods Ve hicles Others
Figure 2.3: Increasing vehicle ownership since 1990
Source: Vahan Portal 2025 & Road Statistics 2019-20
Figure 2.4 shows that as India’s GDP per capita has risen over time, the number of vehicles
per 1,000 people has also increased, indicating a clear link between economic growth, higher
incomes, and greater motorization.
0
50
100
150
200
250
300
13760
1951 1961 1971
1981
1991
2001
2011
2020
16780 19871 21430 29708 42059 68557 107774
Vehicles per 1000 population
GDP Per Capita, INR
Figure 2.4: Vehicles per 1000 population vis-a-vis GDP/capita for India
Source: Road Statistics 2019-20 and India’s population projections based on MoHFW till 2036
As shown in Figure 2.5, vehicle ownership remains the highest in advanced economies, with
New Zealand and the United States exceeding 860 vehicles per 1,000 people, and countries
like Germany, Japan, and Canada reporting between 600 and 700 vehicles per 1,000 people.
These levels reflect high incomes, extensive road infrastructure, and decades of car-centric
urban development along with rising emissions. India, therefore has an opportunity to chart
a different path by prioritising public transport, e-mobility, and compact urban development,
achieving its mobility goals while curbing pollution, emissions, and energy demand. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 16
Transport Sector: Scale, Structure & Growth Drivers
0
100
200
300
400
500
600
700
800
900
1000
United
States
New
Zealand
Canada Germany China Brazil
Vehicles per 1,000 People
Figure 2.5: Representation of vehicles per 1000 population for developed countries
Source: OICA – International Organisation of Motor Vehicle Manufacturers. Retrieved November 28, 2025, from https://oica.net/
23
Fuel mix in road transport: Road transport in India is heavily dependent on fossil fuels–
primarily petrol and diesel, which accounts for more than 80% of the transport sector’s energy
consumption. India’s focus on reducing fossil dependence has led to an increased uptake of
alternative clean fuels and technologies such as, bio-CNG, ethanol, biodiesel and, hybrids and
EVs. EV adoption is growing rapidly, especially in the 2W and 3W segments, with policies
supporting battery swapping, incentives under Faster Adoption and Manufacturing of Hybrid
and Electric Vehicles (FAME) scheme (now PM E-DRIVE scheme), and state EV policies.
For freight, LNG and CNG along with CBG to play a key role in reducing emissions, with
green hydrogen emerging as a long-term zero-emission alternative for heavy-duty vehicles.
Railways
Rail is the most energy-efficient mode for both freight and passenger transport. Between 2013-
14 and 2023-24, rolling stock grew from about 3.3 lakh to 4.35 lakh units, while the share of
electrified broad-gauge routes jumped from 33% to 90%, sharply reducing diesel dependence.
Aiming to become a Net Zero carbon emitter by 2030 through full electrification, renewable
energy integration, and energy-efficient operations, Indian Railways is also modernising via
initiatives such as Vande Bharat trains and Dedicated Freight Corridors (DFCs), enhancing
speed, capacity, and efficiency and encouraging a modal shift from road to rail
24
. Additionally,
pilot projects on hydrogen fuel cell-based trains and battery-powered locomotives are underway
as part of Indian Railways’ Net Zero ambitions. While India invests across all transport sectors,
rail receives the largest share of public funds due to limited private participation. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 17
Transport Sector: Scale, Structure & Growth Drivers
Dedicated Freight Corridors
India’s High Density and Highly Utilised Networks (HDN & HUN), covering 41% of route
length and carrying 81% of freight, face severe congestion as mixed traffic slows freight trains
by nearly half. To address this, the Dedicated Freight Corridors (DFCs), approved in 2006,
were developed to enhance freight efficiency. With 96.4% of the planned 2,843 km network
now complete (1,337 km Eastern and 1,506 km Western)
25
, DFCs enable uninterrupted freight
movement at around 40 kmph. By December 2022, freight speeds averaged 40.7 kmph on
DFCs, compared to 18.8 kmph on the conventional network. Offering higher capacity and
double-stack container trains, DFCs improve port connectivity and promote a shift from road
to rail, significantly enhancing logistics efficiency across India.
Metro
The 2017 Metro Rail Policy enables Central funding for viable, state-proposed metro projects,
helping India build an operational metro network of over 1,000 km by January 2025
26
, one of
the largest globally. Metros are easing urban congestion by linking key demand centres with
airports and railway stations. For instance, an IIT-Bombay study of Mumbai Metro found
average time savings of 26 minutes per trip, shifting departure patterns and freeing up road
space during peak hours. Moreover, the Mumbai Metropolitan Region Development Authority
(MMRDA) projects that congestion in Mumbai will shrink from 137% in 2017 to 33% by
2031 as metro reach grows.
27
High Speed Rail (HSR) Potential: Mumbai-Ahmedabad High Speed
Rail (MAHSR) Project
The Mumbai-Ahmedabad High Speed Rail (MAHSR) Project (508 km) is under
execution with technical and financial assistance from Government of Japan. The Project
is passing through the States of Gujarat, Maharashtra and Union Territory of Dadra &
Nagar Haveli with 12 stations planned at Mumbai, Thane, Virar, Boisar, Vapi, Billimora,
Surat, Bharuch, Vadodara, Anand, Ahmedabad and Sabarmati. The Gujarat portion of the
corridor between Vapi and Sabarmati is planned to be completed by Dec, 2027. The entire
project (Maharashtra to Sabarmati section) is expected to be completed by Dec, 2029. An
overall Physical progress of 54.51% has been achieved upto 30/09/2025.
In order to expand the HSR network in India beyond MAHSR corridor, Detailed Project
Report (DPRs) for seven corridors have been prepared by National High Speed Rail
Corporation Limited (NHSRCL) which are under examination. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 18
Transport Sector: Scale, Structure & Growth Drivers
Aviation
India is the world’s third-largest domestic aviation market with rapid growth in airports (74
to 148), aircraft (448 to 674), and domestic passengers (85.2 to 136 million) between 2014-
15 and 2022-23
28, 29, 30
. Domestic traffic surged 61.6% in 2022-23 after a sharp drop during
the period 2020-21
31
, as illustrated in Figure 2.6. In 2019, domestic aviation had a passenger
load factor of 90%, a significant rise from the early 2000s, when the load factor sometimes
dropped to 50%
32
.
0
20
40
60
80
100
120
140
160
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
Passenger kilometre (billi on)
Figure 2.6: Trend of domestic air passenger traffic
Source: Handbook of Civil Aviation Statistics
Figure 2.7 below shows that the domestic cargo volumes have increased nearly four-fold since
2002-03. The aviation expansion will face challenge to low-carbon growth, as ATF, its primary
fuel, has a high lifecycle emissions intensity of about 88.7 gCO₂e/MJ
33
.
0
100
200
300
400
500
600
700
800
Cargo carried ('000 tonnes)
Figure 2.7: Trend of cargo carried by the domestic aviation sector
Source: Handbook of Civil Aviation Statistics, 2022-23 Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 19
Transport Sector: Scale, Structure & Growth Drivers
Waterways
India’s inland waterways and coastal shipping are cost-effective and offer good potential as
low-emission freight modes. Waterways’ freight share reached 8% in billion tonne-kilometres
(BTKMS) by 2025, with gross tonnage rising from 1.19 to 1.72 billion tonnes and the fleet
from 846 to 1,039 vessels (2014–2024); Paradip Port handled the highest coastal cargo in
2022–23.
Inland and coastal vessels currently run mainly on diesel, but there is a growing push toward
cleaner alternatives. This includes CNG and LNG-powered barges, biofuels, shore-to-ship
power, hybrid-electric propulsion. There are also emerging options like green hydrogen and
methanol for selected pilot projects and future green shipping corridors.
Pipelines
Pipelines are among India’s most energy‑efficient, low‑cost, and low‑emission modes for
transporting hydrocarbons and gaseous fuels. The country now has over 25,000 km of
operational natural gas pipelines, with plans to expand this to about 35,000 km under the “One
Nation, One Gas Grid” initiative. In addition, more than 34,500 km of petroleum pipelines are
in place, including roughly 10,447 km of crude oil pipelines, 5,231 km of LPG pipelines, and
about 18,899 km of other petroleum product pipelines, with a further 4,300 km of petroleum/
product pipelines under construction. They enable cleaner mobility by supporting wider use
of CNG and LNG in freight and public transport. They are being future-proofed to carry
fuels like ethanol blends, Compressed Bio-Gas (CBG), SAF, and green hydrogen. This will
position them as a key backbone for hydrogen hubs, bio-CNG corridors, and India’s Net Zero
by 2070 goals.
2.3 Alternative Clean Fuels, Technologies and their Trends in
Transportation
2.3.1 Electric Vehicles
Electric Vehicles are an important option in the global transformation toward sustainable
transportation. As technological advances drive down battery costs and governments introduce
supportive policies, EV adoption continues to increase.
In India, the shift is visible and as shown in Figure 2.8, 2Ws have grown from 0.1% of new
registrations in FY 2020 to 5.38% in FY 2024, while electric 4Ws increased from 0.1% to
around 5% in 2024. The 3W category has seen a remarkable jump–from 17.6% to 54.2%
in the same period, even reaching 22.8% when excluding e-rickshaws and e-carts. The
FAME-II scheme accelerated this transformation, and the recently launched FAME-III aims
to strengthen the ecosystem with wider incentives for charging, battery swapping, and multi- Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 20
Transport Sector: Scale, Structure & Growth Drivers
segment coverage. However, electrification of heavy-duty trucks remains challenging due to
costs and range limitations.
0%
10%
20%
30%
40%
50%
60%
FY 2020 FY 2021 FY 2022 FY 2023 FY 2024
EV penetration
2W 3W 4W
Figure 2.8: EV sales penetration (% of new registrations) in India across 2W, 3W and 4W
Source: Vahan Portal
34
EV Adoption in China
China exemplifies a highly successful EV adoption story, emerging as the global leader in electric
mobility. 24% of new car sales in 2024 were electric and 20% are hybrids. This growth has been
driven by substantial government incentives, strategic industrial policies, and the large-scale
rollout of charging infrastructure. In 2021, China accounted for nearly half of the world’s electric
vehicle sales; this share grew to almost two-thirds in 2024
35
. Domestic manufacturers like BYD
and NIO have gained prominence, facilitating the rapid electrification of both passenger and
commercial vehicles. China’s EV revolution is crucial in combating urban air pollution, creating a
robust industrial ecosystem, and solidifying its position as a global clean-technology powerhouse.
Not only China, but also major markets around the world are embracing both electric
and partial electric i.e. hybrid technologies to decarbonise the auto sector.
xEV Technology Penetration Globally CY’24
Major Passenger Vehicles
Market
Battery Electric Vehicle
Penetration
Hybrid Penetration
China24%20%
USA8%12%
EU12%15%
Global Average13%14%
Source: Nomura Research Institute
xEV: Electrified vehicles (generic term for all types of electric vehicles i.e., Battery EV, Strong Hybrid EV, Range Extender EV, Plug-in
Hybrid EV) Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 21
Transport Sector: Scale, Structure & Growth Drivers
EV Adoption in Norway
Norway, on the other hand, has set a global benchmark for EV penetration, achieving the
highest market share worldwide, with electric vehicles constituting over 80% of new car sales.
Aggressive incentives, tax exemptions, and investments in a comprehensive charging network
have significantly boosted consumer confidence. Norway’s EV adoption is powered by a broad
incentive framework-spanning exemptions on VAT and import/purchase taxes, reduced or waived
road and toll charges, free municipal parking, bus-lane access, company car tax breaks, and zero-
emission public procurement. This illustrates how deliberate governmental support can rapidly
transform national transport systems and consumer preferences, accelerating the shift towards
sustainable mobility. However, the key difference is that the market size of Norway is 1.3 lakh
cars compared to 43 lakh car market in India.
Range-Extended Electric Vehicles (REEVs) as a Transitional
Enabler in Electrification Strategy
Globally, mature EV markets such as China show that consumer concerns around range and
charging convenience are driving diversification beyond BEVs. Range-Extended Electric Vehicles
(REEVs), a BEV-derivative technology, are gaining significant traction, growing from 4% to 13%
of New Energy Vehicle sales between 2021 and 2025 in China. REEVs operate as electric-first
vehicles, with propulsion entirely via an electric motor and an onboard internal combustion engine
functioning only as a generator when battery charge is low.
From an emissions perspective, REEVs can deliver meaningful near-term benefits. Urban usage
is predominantly electric, resulting in zero tailpipe emissions comparable to BEVs. In mixed
and highway usage, the engine operates intermittently at constant load and high efficiency,
leading to approximately 60–70% lower CO₂ emissions per kilometre compared to conventional
ICE vehicles in real-world driving. REEVs may represent a logical diversification of India’s
electrification strategy, and complements pure electrification until the wider ecosystem matures.
2.3.2 Biofuels in Transportation
Biofuels hold immense promise for India’s dual goals of energy security and emission reduction.
Through the National Biofuel Policy and Ethanol Blended Petrol (EBP) Programme, India
achieved its 20% ethanol blending target ahead of schedule
36
. Ethanol derived from surplus
sugarcane and grains has improved farmer incomes while promoting energy diversification. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 22
Transport Sector: Scale, Structure & Growth Drivers
Brazil Biofuel Program
Brazil stands out globally as a remarkable success story in biofuels, particularly ethanol derived
from sugarcane. The nation’s Proálcool program, initiated in 1975, has positioned the country as a
global leader in sugarcane-based ethanol production. Ethanol output surged from 0.6 billion litres in
1975-76 to 3.4 billion litres in 1979-80, reaching 12.7 billion litres by 1992. Governmental support
through mandates, subsidies, and infrastructure investments, alongside the widespread adoption
of flex-fuel vehicles, significantly reduced reliance on imported petroleum and lowered carbon
emissions. The ethanol blend in gasoline has varied over time, reaching up to 25% during certain
periods. As of 2025, Brazil is considering increasing the ethanol blend to 30% (E30), with tests
indicating consistent performance and environmental benefits. Effective agricultural management,
favorable climatic conditions, and continuous technological innovations have reinforced Brazil’s
status as a biofuel powerhouse, offering a replicable model for other developing economies.
Despite these achievements, challenges persist—feedstock availability, food versus fuel
competition, and fragmented logistics continue to restrict scaling. Addressing these requires
investment in advanced biofuel technologies, stronger supply chains, and policy-driven
research.
Harnessing Biofuels for a Circular Carbon Economy: A Pathway to
Sustainable Transport
The Circular Carbon Economy (CCE) promotes sustainability by keeping carbon in a closed loop-
reducing, reusing, recycling, and removing it across sectors like energy, industry, and transport.
Biofuels exemplify this principle. The CO₂ released during their combustion is not new to the
atmosphere; it originates from carbon absorbed by biomass through photosynthesis. When burned,
this carbon simply re-enters the atmospheric cycle, making biofuels effectively carbon-neutral
under optimal conditions. However, the carbon neutrality must be tested and verified on a Life
Cycle Assessment (LCA) basis for each fuel pathway.
Unlike fossil fuels, which release ancient carbon stored underground, biofuels recycle atmospheric
carbon, helping to curb net emissions. When integrated with Carbon Capture and Storage (CCS),
they can even achieve negative emissions, making them a key enabler of the transition toward a
circular and sustainable low-carbon future.
Compressed Bio-Gas (CBG): It represents a waste-to-energy solution. Produced from
agricultural residues, municipal waste, and other organic materials, CBG can seamlessly
integrate with existing CNG infrastructure. Under the SATAT (Sustainable Alternative
Towards Affordable Transportation) initiative, India targets 5% CBG blending by 2028-29
37
.
This initiative promotes waste valorization, supports rural livelihoods, and strengthens the
circular economy. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 23
Transport Sector: Scale, Structure & Growth Drivers
CBG: A High-Potential Fuel for India’s Net Zero Mobility
Compressed Bio-gas (CBG) is produced by converting organic waste such as crop residues, cattle
dung and food waste into biogas, which is then purified and compressed to make a fuel that can
directly substitute CNG in vehicles. Recent lifecycle studies, indicate Bio‑CNG as a vehicular fuel
in India that can operate as a carbon‑negative fuel over its life cycle when methane avoidance
and co‑product benefits are fully accounted for
38
.
The International Energy Agency (IEA) estimates India’s technical biomethane/CBG potential
at about 87 billion cubic metres per year, giving India a advantage as a global leader in biogas
and an opportunity to cut transport emissions and move towards net‑zero mobility. Scaling
CBG production and blending it into the existing CNG network can thus deliver deep emissions
reductions while simultaneously supporting rural incomes, waste management, and energy security.
Sustainable Aviation Fuel (SAF): SAF is important for aviation industry to achieve its
decarbonisation goals. Derived from second-generation ethanol and other advanced feedstocks,
SAF can reduce greenhouse gas emissions by up to 80% compared to traditional jet fuel
39
.
Globally, aviation contributes 3% of total CO₂ emissions and 12% of transport emissions, but
its climate impact may be two to four times higher when non-CO₂ pollutants are considered.
To achieve the International Civil Aviation Organization’s (ICAO) aspirational goal of
Carbon Neutral Growth from 2020 onward, ICAO has implemented the Carbon Offsetting
and Reduction Scheme for International Aviation (CORSIA), a market-based measure aimed
at reducing carbon emissions from international aviation. As a member state of ICAO, India
is obligated to comply with CORSIA’s mandatory phase starting in 2027 (Ministry of Civil
Aviation (MoCA), 2023). The National Biofuels Coordination Committee has set blending
targets for SAF at 1% for 2027 and 2% for 2028, applicable to international flights (MoPNG,
2023). With significant investments underway and pilot projects already operational, SAF is
expected to not only help airlines comply with CORSIA but also stimulate local green fuel
industries, enhancing energy security and contributing to India’s overall emissions reduction
goals.
2.3.3 Green Hydrogen and Its Derivatives
Green hydrogen is considered an important option for decarbonising hard-to-electrify sectors
such as long-haul transport, heavy-duty trucks and shipping. Green hydrogen is produced
through electrolysis powered by renewable energy
40
. The Global electrolyser capacity for
green hydrogen production reached 1.4 GW by the end of 2023
41
.
Germany has introduced hydrogen-powered trains, while Japan and South Korea have
developed fuel-cell vehicle networks. Additionally, hydrogen internal combustion engines (H2-
ICEs) are under development, achieving thermal efficiencies of approximately 40%. India’s Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 24
Transport Sector: Scale, Structure & Growth Drivers
National Green Hydrogen Mission aims to achieve 5 MTPA production capacity by 2030.
Current pilots include 37 hydrogen vehicles (buses and trucks), and nine refuelling stations.
Success in these initiatives will depend on proactive policymaking, targeted fiscal incentives,
international technology collaborations, and robust regulatory frameworks to position India
as a competitive global hub for green hydrogen.
2.3.4 Natural Gas
Compressed Natural Gas (CNG) has emerged as a key fuel option, supported by targeted
government policies and sustained investments in refuelling infrastructure. Delhi has been
an early mover in this transition, with early large-scale deployment of CNG in buses, taxis
and auto-rickshaws. As per high-level expert committee report of PNGRB, Delhi registered
around 6.5 Lakh CNG vehicles. Assuming these replaced their conventional petrol and diesel
counterparts, Delhi has avoided approximately 40 Lakh tonnes of CO₂ and more than 2,500
tonnes of PM emissions. The CO₂ savings are equivalent to planting more than 70 Lakh
trees across Delhi, in addition to significant positive benefit for public health
42
. Empirical
studies indicate that CNG buses can emit up to 46 times less particulate matter (PM) than
comparable diesel buses
43
. However, wider adoption of CNG hinges on expanding refuelling
infrastructure, streamlining grid injections, and securing long-term, affordable gas supplies.
Figure 2.9 shows the change in CNG vehicle penetration as percentage of new registrations
across light, medium, and heavy goods vehicle (LGV, MGV, and HGV) categories.
3.8%
5.3%
15.1%
12.9%12.3%
10.8%
19.3%
37.2%
20.5%
10.7%
0.5%
1.8%
5.9%
2.9%
1.8%
FY 2020 FY 2021 FY 2022 FY 2023 FY 2024
LGV MGV HGV
CNG Vehicle Penetration %
0%
5%
10%
15%
20%
25%
30%
35%
40%
Figure 2.9: CNG vehicle sales penetration among LGVs, MGVs, and HGVs*
Source: Vahan Portal
* LGVs, MGVs, and HGVs: Light, Medium, and Heavy Goods Vehicles Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 25
Transport Sector: Scale, Structure & Growth Drivers
Liquefied Natural Gas (LNG) is simultaneously gaining prominence as a lower-emission fuel
option for heavy-duty vehicles (HDVs), long-haul freight and shipping, where energy density
and range requirements are more demanding. Compared to conventional marine fuel oil or
diesel, LNG can significantly reduce emissions, making it a technically attractive bridge
solution for hard-to-abate segments. Countries such as China and the United States have
already developed LNG “corridors” with dedicated refuelling infrastructure along key freight
routes, enabling reliable logistics chains.
In India, LNG adoption remains at a relatively early stage despite initiatives such as the plan to
develop around 50 LNG stations along the Golden Quadrilateral. Key hurdles include limited
pipeline connectivity from underutilised LNG terminals, high capital costs for cryogenic
storage, dispensing, and fuel tank of vehicle, a sparse refuelling network creating a demand–
supply gap, and complex multi-agency approvals.
China’s LNG Growth Story in HDVs: A Model for Clean Transport
Over the past decade, China has rapidly scaled the adoption of Liquefied Natural Gas (LNG)
in the heavy-duty vehicle (HDV) segment, emerging as the world’s largest LNG truck market.
Driven by a powerful mix of policy support, economic incentives, and infrastructure development,
the country’s LNG journey offers valuable insights.
Key Growth Milestones
Over 600,000 LNG HDVs on road (as of 2023) – accounting for more than 90% of
the global LNG truck fleet. (Source: IEA, 2023; S&P Global)
More than 2,000 LNG refueling stations established nationwide, strategically located
on high-traffic freight corridors. (Source: NGV Global News, 2022)
LNG trucks accounted for nearly 13% of all new HDV sales in 2021, rising from 4%
in 2017. (Source: IEA, “Global EV Outlook 2022” – LNG Market Trends)
LNG prices were consistently 20–30% cheaper than diesel during peak demand periods
(2020–2022), fueling rapid adoption. (Source: China National Petroleum Corporation
– CNPC reports)
China’s approach—coordinated government support, scale-driven cost optimization, and clear
policy signals—has made LNG HDVs not just viable, but attractive. China seeded both supply
and demand in parallel. For nations seeking cleaner freight transport without waiting for full
electrification, LNG can offer a scalable, near-term bridge. 3
CURRENT POLICY
LANDSCAPE IN THE
TRANSPORT SECTOR 28Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport
3
Current Policy
Landscape in the
Transport Sector
Achieving Net Zero transport emissions by 2070 will require a robust, multifaceted policy
framework tailored to India’s needs. Key strategies include promoting Transit-Oriented
Development (TOD) in cities, shifting travel to public and non-motorised modes, accelerating
the adoption of clean fuels and electric vehicles (EVs), and enforcing stringent efficiency
and emission norms. This chapter examines the global policy landscape driving transport
decarbonisation and India’s own policy initiatives, identifying how they converge and
where gaps remain. Behavioural nudges and successful case studies are also examined as
complementary instruments for steering India’s mobility toward sustainability.
3.1 Global Trends in Transport Decarbonisation Policy
Globally, governments are enacting ambitious policies to curb transport emissions.
Vehicle electrification: The European Union (EU) has announced that all new cars sold from
2035 onward to be zero-emission, effectively phasing out new petrol and diesel vehicles.
However, based on the reassessment, the target has now been relaxed slightly. Several countries
and states have similar targets – for example, the UK’s Zero-Emission Vehicle (ZEV) mandate
requires 100% of new car and van sales to be zero-emission by 2035
44
, and California in the
U.S. has adopted a 2035 phase-out of new combustion car sales. In China, policymakers use
a dual-credit system: automakers must meet escalating New Energy Vehicle (NEV) credit
targets of 28% in 2024 and 38% in 2025, which is expected to translate to at least 20% of
new car sales being electric by 2025 – aligning with China’s official goal
45
. Early-adopter
countries like Norway already demonstrate what’s achievable: supported by incentives and
charging infrastructure, 93% of new cars sold in Norway in 2023 were electric (85% fully
battery-electric)
46
, showing a near-total shift in the market. The United States in 2022, adopted
a strong incentive-driven approach through the Inflation Reduction Act (IRA), which provided
consumer tax credits (up to USD 7,500) for EV purchases and generous production credits for Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 29
Current Policy Landscape in the Transport Sector
domestic EV battery manufacturing, spurring investment in clean vehicles. More recent actions
under the Trump administration, however, have signaled a rollback of these measures, creating
uncertainty for manufacturers and investors and potentially moderating the momentum of EV
adoption.
Fuel decarbonisation policy. The EU’s Renewable Energy Directive (RED) has set binding
targets for renewable fuel use in transport. Under the latest RED III update, EU countries
must achieve roughly 29% renewable energy in transport by 2030 (or equivalently a 14.5%
reduction in fuel carbon intensity)
47
. This includes a dedicated sub-target of at least 5.5%
coming from advanced biofuels and renewable hydrogen
48
. (RED II had previously mandated
14% renewable transport energy by 2030 with a 3.5% advanced biofuel sub-share.) Many
European nations also enforce blending mandates for biofuels to meet these goals. For example,
Germany, France, and others require increasing shares of ethanol and biodiesel blends in road
fuels, while the EU’s new ReFuelEU Aviation rules mandate blending of sustainable aviation
fuels reaching 6% by 2030 and 20% by 2035
49
. These measures are pushing fuel suppliers to
scale up low-carbon fuels and reduce reliance on fossil oil.
Fuel economy and emission standards. The EU has the tightest CO₂ emission rules, requiring
a 55% cut in new‑car emissions by 2030 compared to 2021 levels and a 100% cut (0 g/km) by
2035. China’s latest light‑duty rules push average fuel consumption for new passenger vehicles
to 4 L/100 km on New European Driving Cycle (NEDC) test by 2025. This is backed by
New Energy Vehicle (NEV) credit mandate which requires automakers to meet annual credit
targets. Eligible technologies include battery electric vehicles (BEVs), plug-in hybrid electric
vehicles (PHEVs), fuel-cell vehicles (FCVs), and range-extended electric vehicles (REEVs).
Beyond regulations, many countries are supporting infrastructure and modal shift initiatives.
For instance, Japan and South Korea are investing heavily in hydrogen fuel cell vehicle
deployment (especially for trucks and buses) alongside EV rollouts, as part of goals to reach
carbon-neutral transport by 2050. Cities around the world are also integrating transport
networks and experimenting with innovative measures: Singapore has combined its mass rapid
transit, buses, and ride-sharing under a unified payment system with real-time information,
alongside policies like congestion pricing, to make car-light living practical. London and
several European cities have introduced “ultra-low emission zones” and high parking fees to
nudge commuters toward public transit and active travel. These international examples provide
valuable comparisons and cautionary tales as India charts its own path.
3.2 India’s Transport Sector Policy Interventions
Over the past decade, India has launched a comprehensive set of policies to promote cleaner
mobility. These can be grouped into three broad categories: (a) Emission & efficiency Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 30
Current Policy Landscape in the Transport Sector
standards, (b) Fuel and technology transition policies, and (c) Infrastructure & modal shift
initiatives. Together, these measures aim to improve vehicle performance, accelerate the uptake
of alternative fuels and EVs, and enhance the overall efficiency of the transport system.
3.2.1 Emission & Efficiency Standards
India’s framework for cleaning up road transport rests on three complementary levers:
a. Bharat Stage (BS) emission norms and fuel quality standards sets limits for local
air pollutants from new vehicles.
b. Corporate Average Fuel Efficiency (CAFE) norms cap fleet-average grams CO₂/
km and push efficiency.
c. National Vehicle Scrappage Policy (2021) retires old, high-emitting vehicles and
refreshes the fleet.
Together, these instruments tighten standards for new vehicles, fuels, and the existing fleet,
steadily reducing both air pollution and CO₂ intensity.
Table 3.1: Key policies and standards on vehicle emissions and fuel efficiency
Pillar Instrument
Scope &
Mechanism
Key Milestones
Role in Emissions /
Efficiency
Tailpipe
emission
limits & fuel
quality
Bharat
Stage (BS)
norms
Euro-aligned
standards for new
vehicles, caps
NOx, PM, CO,
HC. Applied at
type-approval
for all new ICE
vehicles.
India 2000 (≈ Euro 1)
– first national norms.
BS-II (2001–05),
BS-III (to 2010),
BS-IV nationwide by
2017. BS-VI from
Apr 2020 (skipping
Euro 5), BS-VI Stage
2 (BS6.2) with Real
Driving Emissions and
advanced On-Board
Diagnostics (OBD)
from Apr 2023
50
.
Sharp cuts in local
pollutants, especially
from diesel vehicles;
The leap from BS-IV
to BS-VI norms in
India for diesel cars cut
NO
X emission limits by
about two-thirds (≈68%)
and PM limits by over
80%
51
.
Fuel
quality
standards
Align petrol/diesel
quality with BS
norms, where
key parameter is
sulfur content.
Coordinated with BS
rollouts. BS-VI fuels
at 10 ppm Sulfur
nationwide from
2020.
Low-sulfur fuels
enable advanced after-
treatment, lower soot
and sulfate formation,
and directly improve
urban air quality from
new fleets. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 31
Current Policy Landscape in the Transport Sector
Pillar Instrument
Scope &
Mechanism
Key Milestones
Role in Emissions /
Efficiency
CO
2 & fuel-
efficiency
standards
CAFE
norms
(fleet-
average
CO
2/km)
Applies to
manufacturers’
new passenger-
vehicle fleets
capping
average CO₂/
km, incentivise
efficient engines,
light-weighting,
hybrids/EVs.
Phase 1 (2017–2022):
130 g CO
2/km. Phase
2 (2022–2027):
113 g CO
2/km.
Future phases under
discussion to align
with global best
practice.
52
Reduces fuel
consumption per
km; push technology
upgrades and higher
share of hybrid/EV
models. Current rules
give limited explicit
credit for biofuels,
flagged as an area for
refinement.
Fleet renewal
/ end-of-life
management
National
Vehicle
Scrappage
Policy
(2021)
53
Systematic
retirement of old
and unfit vehicles
via mandatory
fitness tests
and authorised
scrappage centres.
Commercial vehicles
>8 yrs and private
vehicles >15 yrs must
undergo automated
fitness tests; failing/
unfit vehicles are
deregistered and
scrapped. Owners
receive road-tax
rebates, waived
registration fees on
new vehicles, and
scrap value.
Expected to cut
emissions from replaced
vehicles by 25–30%,
improve average fleet
fuel economy and safety,
and create a formal
recycling industry
(recovered metals,
jobs, and new-vehicle
demand). Public fleets
and STUs are early
adopters, scrappage
centres are being rolled
out across states.
3.2.2 Fuel and Technology Transition Policies
India’s transport-fuel strategy extends well beyond fossil-fuel efficiency. It follows a multi-
track pathway including biofuels, biogas, natural gas, green hydrogen, and gaseous fuels
(CNG/LNG) to cut both tailpipe and lifecycle CO₂. These measures complement vehicle-
efficiency norms by lowering the carbon intensity of fuels, while also building new domestic
energy industries that reduce crude-oil dependence.
Table 3.2: Key policies and programs enabling fuel transition in transport sector
Key Instrument /
Programme
Mechanism & Scope
Key Milestones
& Targets
Progress & Highlights
Ethanol
(E20)
National Policy
on Biofuels
(2018, rev. 2022)
& Ethanol
Blended Petrol
(EBP)
Mandates ethanol
blending in petrol,
diversifies feedstock
(sugarcane, maize,
damaged grain) with
assured pricing and
OMC procurement.
E20 Target
advanced from
2030 to 2025-26.
E20 achieved by
mid-2025 (20%
blend vs 2% in
2013).
54
E20 reduces tank-to-
wheel CO₂ by 10-13%
55
,
improves octane and rural
income linkages. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 32
Current Policy Landscape in the Transport Sector
Key Instrument /
Programme
Mechanism & Scope
Key Milestones
& Targets
Progress & Highlights
Biodiesel
(B5)
National Policy
on Biofuels
56
Encourages blending
biodiesel from Used
Cooking Oil (UCO)
and non-edible
oilseeds in diesel;
supports collection
and supply chains.
National target:
5% biodiesel
blending by
2030.
57
Installed capacity ≈
0.8 billion L (2025) vs
demand of 5.5 billion
L for B5. OMCs issued
tenders for 3.7 billion
L procurement
58
. UCO
repurposing initiative
launched in 100+ cities.
Compressed
Bio-Gas
(CBG)
SATAT
(Sustainable
Alternative
Towards
Affordable
Transportation)
Produces CBG from
agri-residues &
municipal waste and
injects into CNG
grids; assures offtake
by Oil Marketing
Companies
(OMCs) and City
Gas Distributions
(CGDs).
Launched in
2018, target:
5,000 plants
by 2030 with
CBG blending
obligation of 5%
in CNG/PNG
from FY 2029.
As on November 2025,
173 CBG plants have
been commissioned
and 285 CBG plants
are at various stages of
construction.
59
Natural Gas
(CNG/LNG)
National
Gas Grid &
Transport
Corridor
Programme
Expands CNG for
urban vehicles and
LNG for long-haul
trucks; acts as a key
fuel before bio- and
H₂-integration.
> Already more
than 9000 CNG
stations are
existing as on
Nov’25 and 50
LNG corridor
stations planned
by 2028.
CNG fleet > 9 million
vehicles with 25–30%
lower CO₂ and 50–80%
lower PM vs diesel
60
.
Pilot LNG freight
corridors operational
on the Golden
Quadrilateral.
61
Green
Hydrogen
National Green
Hydrogen
Mission (2023)
62
Promotes renewable-
powered electrolysis
to produce green
H₂ for transport and
industry; includes
Production Linked
Incentives (PLIs)
and Viability gap
Funding (VGF)
for electrolyser
manufacture and
fuel-cell pilots.
Goal: 5 million
tpa green H
2
by 2030 (i)
Phase I (2023-
26) pilots and
manufacturing (ii)
Phase II (2026-
30) commercial
scale-up.
Phase I allocates ₹19,744
crore support. Five pilot
projects involving 37
hydrogen-fuelled buses
and trucks (15 fuel-cell,
22 H₂-ICE). Green H₂
costs expected to drop to
<USD 2/kg by 2030.
63
Sustainable
Aviation Fuel
(SAF)
National SAF
Initiative aligned
with ICAO
CORSIA
Develops bio-
based jet fuel using
Hydroprocessed
Esters and Fatty
Acids (HEFA),
Alcohol-to-Jet (ATJ)
and Fischer-Tropsch
(FT) routes; promotes
domestic production
and blending
mandates.
Target: 1% SAF
blending by 2027,
2% by 2028, 10%
by 2035.
India’s first SAF plant
produces ≈ 3,200 t/y;
public-sector refineries
preparing to scale to
≈ 32,000 t by 2027.
Lifecycle CO₂ cuts
60–80% vs conventional
jet fuel
64
. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 33
Current Policy Landscape in the Transport Sector
Parallel to fuel decarbonization, India’s electrification drive will eliminate direct emissions
from vehicles through widespread adoption of electric mobility. Policy measures spanning the
FAME and PM E-DRIVE schemes, battery manufacturing PLIs, battery swapping, charging
networks, and railway electrification collectively anchor this transition.
Table 3.3: Key policies and programs to promote electrification in transport sector
Pillar
Key Instrument /
Programme
Mechanism & Focus
Key Milestones &
Targets
Progress & Highlights
National EV
Mission
FAME-I (2015–
19), FAME-II
(2019–24), and
PM E-DRIVE
(2024–26)
National-level
demand incentives
for EVs, and
supports vehicle
subsidies, charging
infrastructure, and
manufacturing
ecosystem
FAME-I (₹895 cr),
FAME-II (₹10,000
cr), PM E-DRIVE
(₹10,900 cr).
Targets: 8–10
million EVs and
50,000 public
chargers under PM
E-DRIVE
65
>1.2 million EVs
deployed under
FAME-II.
GST at 5%, road-tax
waivers in 20+ states
Domestic
Manufactur-
ing
PLI – Advanced
Chemistry Cell
(ACC) Batteries
(₹18,100 cr)
and PLI –
Automotive
Sector (₹25,938
cr)
Incentivises
domestic battery
cell gigafactories
and EV/FCV model
production; linked
to localisation and
export potential
50 GWh battery
capacity by 2030
66
.
India is supporting
50 GWh of ACC
manufacturing
capacity, of which
around 40 GWh has
been awarded so
far, with the balance
under re‑tendering.
Battery
Swapping
Policy
Battery
Swapping Policy
(2022): Battery-
as-a-Service
(BaaS) for
two- and three-
wheelers
Enables battery
standardisation
and pay-per-use
energy model;
reduces upfront
cost by separating
vehicle and battery
ownership
Interoperability
standards by
BIS, 1,000 swap
stations target by
2025
67
India now has
roughly 2,500–
2,600 operational
battery‑swapping
kiosks, with a large
share located in
major metropolitan
regions such as Delhi
NCR, Mumbai, and
Bengaluru.
Charging
Infrastructure
PM E-Drive Public and private
charging network
expansion; grid
integration and tariff
rationalization
75,000 chargers
(2025), 700,000
chargers by 2030
including 10,000
depot chargers
Unified Bharat EV
App launched for
nationwide station
access
68
Public and
Shared
Transport
Electrification
E-Bus and Fleet
Electrification
Schemes
Urban transport
electrification
via concessional
financing, PPP, and
leasing models
50,000 e-buses by
2030 (PM-E Bus
Sewa) and full
electrification of
public fleets in 20
metros by 2030
6,862 electric buses
were sanctioned to
various cities/STUs/
State Govt. entities for
intra-city operations
under the FAME-II
Scheme
69
. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 34
Current Policy Landscape in the Transport Sector
Pillar
Key Instrument /
Programme
Mechanism & Focus
Key Milestones &
Targets
Progress & Highlights
Rail
Transport
Electrification
Mission
Electrification
(MoR)
Electrifies Indian
Railways network;
renewable
integration for
traction
100% broad-gauge
electrification by
2027; Net Zero
Carbon by 2030
More than 90% routes
electrified (62,263
km). Full network
and a Net Zero 2030
vision are in place
Greening the Wheels: Integrating India’s Transport Sector into the
Carbon Market Framework
The Bureau of Energy Efficiency (BEE) under the Ministry of Power is working towards integrating
the transport sector into the India Carbon Market (ICM) to align the sector’s growth trajectory
with India’s climate commitments.
This initiative carries far-reaching implications: it places transport squarely within the purview of
emissions accountability, incentivises decarbonization, and mobilises capital toward sustainable
mobility solutions.
The India Carbon Market (ICM): A Quick Primer
Launched in 2023, the India Carbon Market is a compliance and offset mechanism based trading
scheme designed to promote cost-effective emissions reductions. Entities exceeding defined
emissions thresholds must purchase credits from those who emit less, thereby creating an incentive
structure that rewards low-carbon performance.
Led by BEE and the Ministry of Power, the ICM is being built on strong monitoring, reporting,
and verification (MRV) protocols, with digital registries ensuring transparency, credibility, and
trade efficiency.
India v/s global approach: The EU Emission Trading Scheme (ETS) now covers aviation,
maritime, and through the new ETS II—road transport fuels, creating direct price signals that
encourage fleet electrification and cleaner fuels. California’s Cap-and-Trade includes transport
by regulating fuel distributors upstream, complemented by its Low Carbon Fuel Standard that
rewards low-carbon alternatives. China’s national ETS, while still focused on power, is piloting
transport inclusion through credit trading for new-energy vehicles and fuel-efficiency benchmarks.
3.2.3 Infrastructure & Modal Shift Initiatives
Decarbonisation in transport depends not only on cleaner fuels and vehicles but also on how
people and goods move. India’s strategy therefore integrates infrastructure, planning, and
behavioural interventions that make public, shared, and non-motorised transport the preferred Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 35
Current Policy Landscape in the Transport Sector
choice. Policies such as Transit-Oriented Development (TOD), the Smart Cities Mission,
metro expansion, and Dedicated Freight Corridors (DFCs) together reduce congestion, travel
distances, and fuel consumption—delivering both climate and quality-of-life dividends.
Table 3.4: Key policies and initiatives for transport infrastructure planning
Focus Area
Key Policy /
Programme
Objective &
Mechanism
Key Milestones
& Targets
Progress & Highlights
Urban
Integration &
Planning
National
Transit-
Oriented
Development
Policy (2017)
70
Promote compact,
mixed-use,
walkable urban
growth around
metro/ Bus Rapid
Transit (BRT)
corridors; densify
and align land-use
with transport.
All 100 Smart
Cities to
adopt Transit-
Oriented
Development
(TOD)
principles in
Master Plans
by 2030.
States including Delhi
& Maharashtra have
adopted TOD zoning,
higher Floor Area Ratio
(FAR) near stations. Delhi
TOD corridor (Delhi–
Meerut Regional Rapid
Transit System) integrates
housing + transit.
Smart Cities
Mission (2015–
present)
Fund intelligent
transport, public
space upgrades,
and digital mobility
management.
₹ 2 lakh crore
investment
across 100
cities.
50+ cities introduced
pedestrian zones, ITS,
and cycle tracks. Pune
& Chennai implemented
continuous Non-
Motorised Transport
(NMT) corridors with >
120 km cycle lanes.
Mass Transit
Expansion
Metro Rail
Policy (2017)
& State Metro
Projects
Expand urban
rail to reduce
congestion &
emissions.
50:50 Centre-
State funding;
> 1,000 km
network target
by 2030.
15+ cities operate metros.
Delhi Metro (4.6 M daily
riders, 2023) keeps over
500,000 vehicles off
Delhi’s roads and saves
around 255,000 tonnes of
fuel annually, and was the
world’s first metro system
to earn carbon credits.
71
Urban Bus
Modernisation
& e-Bus
Initiatives
Upgrade city buses
(air-conditioned,
digital ticketing,
women drivers,
e-buses via
FAME).
50,000 e-buses
by 2030 (PM-
eBus Sewa).
Bhubaneswar “Mo Bus”
fleet raised ridership
200% (2018–22); 57%
shifted from private
vehicles. Linked “Mo
e-Ride” e-rickshaw
feeders.
72, 73 Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 36
Current Policy Landscape in the Transport Sector
Focus Area
Key Policy /
Programme
Objective &
Mechanism
Key Milestones
& Targets
Progress & Highlights
Freight &
Logistics Shift
Dedicated
Freight
Corridors
(Eastern &
Western) +
National Rail
Plan 2030
74
Shift freight
from road to rail;
upgrade speeds &
efficiency.
3,300 km
DFC network,
rail freight
share to rise
from 27% →
45% by 2030.
95% track completion
(2025); electrified
corridors cut diesel use
and truck traffic; rail CO₂
intensity –40%.
Maritime India
Vision 2030
& Coastal
Shipping Bill
2025
Promote coastal
shipping, inland
waterways & green
port operations.
Coastal freight
share to reach
10% by 2030;
all major
ports to use
RE power by
2030.
Green Port Guidelines
(Harit Sagar) adopted;
80% major ports running
on renewables; pilot ships
using green ammonia &
methanol.
75
Aviation
Greening
National Civil
Aviation Policy
(2016) &
Green Airports
Programme
76
Improve aviation
efficiency & enable
bio-jet fuel use.
100% RE
power for
airports by
2030; SAF
blending
roadmap
aligned to
CORSIA.
> 80 airports powered by
renewables; bio-jet trials
underway with Indian
Airlines; green-airport
certifications rising.
Non-
Motorised
Transport
(NMT)
Cycle4Change
&
Streets4People
Challenges
under Smart
Cities Mission
Prioritise cycling
and walking
through incentives
and infrastructure.
100 cities
to create
safe NMT
corridors by
2027.
Pune, Bengaluru, New
Town Kolkata launched
bike-share systems and
protected cycle tracks;
pedestrian redesigns
reduce accidents &
emissions.
3.3 Behavioural Nudges for Sustainable Mobility
Technological and infrastructural advances can only go so far. To achieve sustained
decarbonization, human behaviour must shift toward cleaner transport choices. Behavioural
nudges use subtle psychological cues, social norms, and design principles to make low-carbon
mobility the “default” or more appealing option, without restricting freedom or imposing costs.
These interventions, rooted in behavioural economics and the EAST (Easy, Attractive, Social,
Timely) framework, complement hard policies by addressing the cognitive and social barriers
that keep people dependent on private vehicles. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 37
Current Policy Landscape in the Transport Sector
Table 3.5: Behavioural nudges and interventions for promoting sustainable mobility choices
Type of Nudge
Mechanism /
Intervention
Objective &
Approach
Key Examples & Global/
Indian Applications
Urban Design
Nudges
Modify
physical
environment
to prompt
sustainable
behaviour
subconsciously.
Influence
travel choices
and safety
through visual
or experiential
cues.
Piano Stairs (Stockholm): turned stairs
into playable keys, increasing stair use by
66%.
3D Crosswalks (India): optical illusion to
slow drivers, enhancing pedestrian safety.
Color-coded cycle lanes in Pune and
Bengaluru improve visibility and cycling
rates.
77
Information &
Social Nudges
Use real-time
data, peer
comparisons,
or social proof
to encourage
modal shift.
Reduce
uncertainty and
leverage norms
for public/
active travel.
Bus arrival displays & journey apps
(London, Singapore, Indian cities)
reduce perceived wait time and improve
reliability.
“If you took public transport this month,
you’d save ₹X & Y kg CO₂” stickers on
parking meters.
Neighborhood cycling norm campaigns –
highlight “30% of your peers already bike
to work.”
Soft Incentive
Nudges
(Gamification)
Reward
systems,
recognition,
or gamified
challenges.
Make
sustainable
behaviour
rewarding and
fun.
Singapore’s off-peak travel reward app:
commuters earn points redeemable for
vouchers.
78
“Walk/Bike to Work” challenges (India,
EU).
“Green Wave” cycling lights
(Copenhagen): continuous greens for
cyclists maintaining 20 km/h.
Default
& Choice
Architecture
Design defaults
that favor
sustainable
options while
preserving
choice.
Overcome
inertia by
making eco-
friendly
options the
“path of least
resistance.”
Corporate travel defaults: “Train first,
flight by exception.”
Opt-out carpool programs: employees
automatically enrolled unless they decline.
Automatic bus pass renewal systems in
city metros (e.g., Bengaluru). Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 38
Current Policy Landscape in the Transport Sector
Type of Nudge
Mechanism /
Intervention
Objective &
Approach
Key Examples & Global/
Indian Applications
Social Identity
& Visibility
Nudges
Promote pro-
environmental
identity
through public
cues.
Create pride,
visibility,
and peer
recognition
for sustainable
choices.
Green number plates for EVs (India) –
enhance social visibility, spark curiosity
(“green plate effect”).
Thank-you billboards (“You helped reduce
Delhi’s pollution by taking the metro”).
Public
Campaigns
& Experience
Nudges
Temporary
experiential
shifts to expose
citizens to
alternatives.
Allow people
to “try” car-
free mobility
and experience
benefits.
Raahgiri Day (Gurgaon) – weekly car-free
day encouraging walking and cycling.
Car-Free Sundays (Pune, Hyderabad)
supported by NGOs and city authorities.
While these behavioural initiatives demonstrate that India is beginning to integrate soft power
approaches into its transport strategy, they remain limited in scale and reach. To realise their
full potential, behavioural insights must be mainstreamed across programmes such as Smart
Cities, AMRUT 2.0 (Atal Mission for Rejuvination and Urban Transformation), and future
mobility campaigns.
As India advances towards Net Zero Transport, the next frontier is not just cleaner vehicles
or fuels, but smarter, human-centred mobility behaviour where everyday choices collectively
drive a major emissions shift. 4
PATHWAYS TO
2070: MODELLING
TRANSPORT DEMAND
& ENERGY USE 40Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport
4
Pathways to 2070:
Modelling Transport
Demand & Energy Use
This chapter presents the modelling outcomes that explore how India’s transport sector may
evolve under two scenarios: the Current Policy Scenario (CPS) and a Net Zero Scenario (NZS)
aligned with India’s 2070 climate commitment. The results trace changes in passenger and
freight demand, modal shares, energy use, and fuel mix trajectories through 2070, while also
examining the investment requirements needed to enable this transition.
4.1 Modelling Approaches and Methodology
The analytical models used to project transport sector demand and evaluate energy consumption,
emissions, and potential mitigation strategies in this study broadly fall into three categories:
Top-Down, Bottom-Up, and Integrated Models.
Top-down models rely on aggregate data, macroeconomic indicators, and historical trends to
estimate transport sector demand and emissions. Bottom-up models build projections based
on detailed, disaggregated data, including vehicle stock, travel behaviour, trip distances,
technology adoption, fuel efficiency, and vehicle lifetime. The study uses ASIF Framework
(Activity, Structure, Intensity, and Fuel) which falls under the category of bottom-up models.
Integrated Models, as the name suggests, aim to combine the strengths of top-down and
bottom-up approaches to provide a more holistic view.
i. Top-Down Models: Top-down models rely on aggregate data, macroeconomic
indicators, and historical trends to estimate transport sector demand and emissions.
These models such as Computational General Equilibrium (CGE) Models and System
Dynamics Models are valuable for capturing economy-wide interactions and policy
feedback loops. However, they often lack the granularity needed to assess sector-
specific policies or detailed technological transitions within the transport sector.
ii. Bottom-Up Models: Bottom-up models build projections based on detailed,
disaggregated data, including vehicle stock, travel behaviour, trip distances, technology Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 41
Pathways to 2070: Modelling Transport Demand & Energy Use
adoption, fuel efficiency, and vehicle lifetime. Models in this category such as the
ASIF Framework (Activity, Structure, Intensity, and Fuel), Vehicle Stock Models, and
Fleet-Based Energy Models are particularly useful for evaluating technology shifts,
efficiency improvements, and the impact of transport-specific policies. However,
they tend to overlook broader economic interactions and feedback mechanisms.
iii. Integrated Models: Integrated models aim to combine the strengths of both top-
down and bottom-up approaches to provide a more holistic view of the transport
sector. Examples include TIMES-MARKAL (a family of Energy System Optimisation
Models), MESSAGE-ix, and LEAP (Low Emissions Analysis Platform). These
models enable comprehensive assessments of technology pathways, policy impacts,
and cross-sectoral linkages. Additionally, Network-Based Demand Models represent
another important category that estimates travel demand at a high spatial and temporal
resolution, effectively capturing regional variations in travel behaviour. See below
boxes for description of global transport sector models and Indian transport sector
models.
Various global transport sector models/methodologies
Global Change Analysis Model (GCAM) is a global, multi-sectoral model that
integrates energy, economy, land use, and climate systems. It includes a detailed
transport module that models energy demand, fuel mix, and emissions trajectories
(Developed by PNNL).
Low Emissions Analysis Platform (LEAP) is a hybrid tool, integrating both top-down
and bottom-up approaches, and is used for modelling fuel consumption, emissions
trajectories, and the impact of different transport policies on national decarbonisation
goals (Developed by Stockholm Environment Institute).
IEA Mobility Model (MoMo) is a stock-based scenario planning model leverages
ASIF framework to analyze global transport trends, vehicle fleets, fuel consumption,
and emissions (Developed by IEA).
PRIMES-TREMOVE is a detailed transport simulation model under the broader suite
of energy system optimisation tools used in the EU for policy impact assessments on
emissions, fuel use, and mobility trends (Developed by E3Mlab).
Roadmap model is a bottom-up model based on ASIF framework with inputs derived
from IEA MoMo and is used for understanding the impact of various policies and
technological advancements on the future of transportation (Developed by International
Council on Clean Transportation).
Policy Ambition and Sustainable Transport Assessment (PASTA) is a bottom-up
model integrating spatial factor and considers analyses how transport demand is met,
considering mode choices and emissions (Developed by International Transport Forum). Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 42
Pathways to 2070: Modelling Transport Demand & Energy Use
Various Indian transport sector models/methodologies
Indian Energy Security Scenarios (IESS) 2047 is a scenario building bottom-up based
tool with capability to understand the impact of adoption of various technology choices,
fuel consumption, emissions and transport policies (Developed by NITI Aayog).
GCAM-India model is a customised Indian version of global GCAM with transport
demand driven by GDP, Population, modal choices and fuel prices (Customised by
CEEW)
TptM is a bottom-up based tool leverages ASIF framework to project transport demand,
fuel use and GHG emissions (Developed by TERI)
India Multi-Region Times (IMRT) Model is a hybrid model which combines ASIF
framework and TIMES optimisation and uses inputs such as population, investment
trends, and urbanisation rates to project transport demand (Developed by CSTEP)
Activity Analysis Module (AAM) is a multi-sectoral and top-down dynamic optimisation
based model leverages Social Accounting Matrix (SAM) based on National Sample
Survey (NSS) data to project transport demand, fuel demand and emissions (Developed
by IRADe)
India Emission Model (IEM) is a bottom-up fleet stock assessment based model
estimates annual emissions of pollutants from India’s on-road vehicles and costs of
cleaner technologies (Developed by ICCT)
4.1.1 Methodology for Final Energy Demand Estimation of Transport
Sector
For this study, NITI Aayog adopted a modified bottom-up ASIF structure to project the
transport demand and emissions (Figure 4.1). Emissions are product of:
i. Transport sector activity measured in passenger-km or tonne-km
ii. Modal structure of the overall transport
iii. Vehicle categorisation (2W, 3W, 4W etc) further categorised into fuel technology
such as EVs, Petrol, Diesel, etc. and corresponding fuel intensity of each vehicular
category
iv. Mileage for each fuel technology and vehicle category for estimating final energy
demand
v. Emission factor for each fuel Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 43
Pathways to 2070: Modelling Transport Demand & Energy Use
This modified ASIF structure was first adopted in the India Energy Security Scenarios (IESS),
a scenario building bottom-up based tool developed by NITI Aayog. The model is capable
of understanding the impact of modal shift, fuel technology choices, emissions, and transport
policies.
4.1.2 Passenger and Freight Transport Modelling Approaches
The modelling of India’s transport sector adopts a structured approach that differentiates
between passenger and freight demand across major modes. Passenger transport is analysed
under four categories, road, rail, air and metro, while water-based passenger mobility is
excluded due to its negligible share and limited data. Road passenger travel is further divided
into public and private modes, with detailed classifications by vehicle type (buses, cars, two-
and three-wheelers, taxis, omni-buses) and fuel type (diesel, petrol, CNG/LNG, EVs, fuel-cell
vehicles, and flex-fuel options). Rail accounts for both diesel and electric locomotives, with
urban metro and rapid rail systems modelled separately, and aviation focuses on the transition
from conventional turbine fuel to sustainable aviation fuels (SAF).
Freight transport is modelled across five segments, road, rail, air, pipeline, and water. Road
freight is further divided by payload capacity (below 3.5 tonnes, 3.5-12 tonnes, and above 12
tonnes) and by fuel choice (diesel, LNG, CNG, electricity, hydrogen fuel cells). Rail freight
evaluates diesel and electric traction, while water transport considers emerging alternatives
such as green ammonia and green methanol alongside conventional fuels. Aviation freight
explores the potential shift from ATF to SAF.
This comprehensive modelling framework adopted in TIMES (The Integrated Markal EFOM
System) and IESS enables the development of transport sector pathways through 2070
Total Transport
Demand (pkms)
Modal Share
Road Transport
Metro Transport
Rail Transport
Air Transport
Passen ger: Public/
Private share
Fuel Share, efficiency and emission factors
Technology
penetration,
Energy
Consumption,
and Emissions
in each
category of
Transport Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 44
Pathways to 2070: Modelling Transport Demand & Energy Use
Total Transport
Demand (tkms)
Modal Share
Road Transport
Rail Transport
Air Transport
Water Transport
Pipelines Transport
Freight: HCV/
MCV/LCV Share
Fuel Share, efficiency and emission factors
Technology
penetration,
Energy
Consumption,
and Emissions
in each
category of
Transport
Figure 4.1: Methodology representation for transport energy and emission estimation
(a) passenger and (b) freight
4.1.3 Scenarios Compared
The analyses of transport sector demand, fuel consumption, and emissions is undertaken
through two scenarios: Current Policy Scenario (CPS) and Net Zero Scenario (NZS). CPS
primarily reflects the historical growth rate of various inputs in the model such as modal choice,
fuel efficiency improvement, technology penetration (EVs, CNGs, hybrids, hydrogen fuel
vehicles, etc.). This scenario reflects the policies being implemented as of 2023. NZS reflects
the ambitious choices and efforts needed to the same inputs (such as modal choice, technology
penetration, fuel efficiency, etc.) so that the net emissions at economy level reach zero by
2070. The scenario also incorporated the policies already announced. Various assumptions
across input parameters are discussed below, and summary is provided in Table 4.1 below:
Table 4.1: Summary of key indicators in Current Policy Scenario and Net Zero Scenario till 2050 and 2070
Indicator 2023
Current Policy ScenarioNet Zero Scenario
2050 2070 2050 2070
Passenger Kilometres per capita3950 12200 14000 11000 12000
Tonne Kilometres per capita 2920 8200 10000 6500 8000
Urbanisation37% 51% 65% 51% 65%
Modal Share
Passenger
Road 78% 73% 70% 69% 64%
Metro <1% 2% 2% 2% 3%
Rail 17% 19% 20% 22% 25%
Air 4% 7% 8% 7% 8% Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 45
Pathways to 2070: Modelling Transport Demand & Energy Use
Indicator 2023
Current Policy ScenarioNet Zero Scenario
2050 2070 2050 2070
Freight
Road 66% 67% 65% 63% 60%
Rail 22% 24% 25% 27% 30%
Air <1% <1% <1% <1% <1%
Waterways 8% 7% 7% 8% 8%
Pipelines 3.6% 2% 2% 2% 2%
Road Transport
Public
Share (Taxi,
3-W)
47% 49% 50% 54% 60%
Transport Demand (BPKMS/ BTKMS)
The saturation value for Passenger Kilometres (PKMs) per capita is selected to lie between
the levels observed in European economies (around 12,000–15,000 PKM per capita) and
the United States (~20,000 PKM per capita). The higher saturation in the US is attributable
to greater private vehicle ownership and longer average travel distances due to the vast
geographical spread of the country.
In case of passenger, the per-capita saturation level is chosen to be 12,000 km in Net Zero
Scenario (NZS) lower than the Current Policy Scenario (CPS) at 14,000 km. Similarly, in case
of freight, the per-capita saturation level is chosen to be 8,000 Tonnes Kilometres (TKMs) in
NZS lower than the CPS pathway of 10,000 TKMs. This reflects the anticipated adoption of
active planning strategies such as Transit-Oriented Development (TOD), which would reduce
overall transport demand and limit per capita mobility needs despite higher GDP per capita.
Modal Choices
Passenger
Rail: The historical trend registers a declining share of rail in passenger mobility. However,
the rail share is expected to improve due to significant infrastructural investments by Indian
Railways, with rail track length projected to double by 2047.
Rail transport is not only more economical but also easier to decarbonise, making it an important
mode of transport to be promoted for sustainable mobility. According to the National Rail
Plan, passenger demand is expected to rise from 6.9 billion passengers in 2024 to 19.2 billion
passengers by 2051. With average lead distance improving from 150 km in 2024 to 300 km
by 2050s, the proposed rail plan target is assumed to be achieved in Net Zero Scenario (NZS)
which envisages high rail share. The share of rail in passenger transport is assumed to increase
from 17% in 2025 to 20% in Current Policy Scenario (CPS) and 25% in Net Zero Scenario
(NZS) by 2070, reflecting a stronger policy and investment focus on rail as a cost-effective
and low-carbon mode of transport. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 46
Pathways to 2070: Modelling Transport Demand & Energy Use
Metro: India’s metro length grew at a rate of 80 km per year from 600 km in 2020 to 1,000
km by 2025. In-line to this, Current Policy Scenario (CPS) assumes growth of metro length
as 120 km per year. The Net Zero Scenario (NZS) assumes a higher growth rate of 180 km
i
per year, reaching almost 5,000 km by 2047.
Air: According to data by the Directorate General of Civil Aviation (DGCA), passenger kms
have grown at an average annual rate of 9.6% on domestic routes, and at 6.7% on international
routes between 2014 and 2024. In terms of passenger numbers, domestic travel has increased
at 9.7% annually, and international travel at 6.5%.
Looking ahead, it is assumed that aviation passenger traffic can sustain a 8% growth rate
in passenger kms, driven by India’s aspirations to become a developed economy and the
consequent rise in per-capita incomes. As a result, the modal share of air travel is projected
to increase from 4% in 2025 to around 8% by 2070 in both scenarios.
Freight
Rail: Key initiatives by the Government of India in this area, such as the development
of Dedicated Freight Corridors (DFCs), improvements in average freight train speeds,
modernisation of terminals, and reductions in rail tariffs are expected to make rail a more
competitive and reliable freight option.
Driven by these improvements, the share of rail in freight transport is projected to go from
22% in 2025 to 25% by 2070 under Current Policy Scenario (CPS). Under Net Zero Scenario
(NZS), rail’s share is expected to reach 30% by 2070, reflecting deeper policy support, higher
efficiency gains, and the inherent energy and carbon advantages of rail for long-haul freight.
In terms of absolute freight tonnage, Current Policy Scenario (CPS) and Net Zero Scenario
(NZS) projections estimate 4.7- 5.2 billion tonnes (BT) being carried by rail by 2051. This
aligns more closely with Scenario 4 of the National Rail Plan, which envisages around 4.8 BT
of rail freight movement under a modified Business-As-Usual scenario with reduced tariffs.
However, these projections are slightly below the optimistic scenarios of the National Rail
Plan, which estimates 6.1-6.8 BT by 2051, achievable only with more aggressive interventions
such as faster rail speeds, further tariff rationalization, and extensive DFC integration with
multimodal logistics networks.
Thus, while Current Policy Scenario (CPS) and Net Zero Scenario (NZS) reflect a moderate
but realistic growth trajectory, there remains potential for higher rail freight volumes if India
adopts the most ambitious measures outlined in the National Rail Plan, positioning rail as the
low-carbon backbone of the freight sector.
i This is not an improbable assumption of growth given that China added 748 km in 2024. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 47
Pathways to 2070: Modelling Transport Demand & Energy Use
Water: The Maritime Amrit Kaal Vision 2047, set by the Ministry of Ports, Shipping &
Waterways, explicitly targets quadrupling of port capacity from about 2,700 Million Metric
Tonnes Per Annum (MMTPA) in 2024 to over 10,000 MMTPA by 2047, and expansion of
cargo handling capacity from approximately 109 MMTPA to 500 MMTPA by the same year.
Aligned with these capacity goals, the overall movement of goods via water transport,
measured in billion tonne‑kilometres (BTKM), is expected to mirror this trajectory, effectively
quadrupling by 2047 alongside port and cargo growth. In both Current Policy Scenario (CPS)
Net Zero Scenario (NZS), the share achieved in 2047 is expected to stabilise by 2070.
Pipelines: The projections are based on volume and average distance travelled by various
commodities i.e. gas, LPG, crude oil, and other petroleum products. Due to higher share of
fossil commodities in Current Policy Scenario (CPS) , pipeline movement (in terms of ton-km)
is expected to double by 2070. In the Net Zero Scenario (NZS), overall pipeline throughput
is roughly at today’s level, as sector progressively shifts from fossil fuels toward electricity
and low‑carbon fuels.
Share of public & private transport within road mode
Current Policy Scenario (CPS) assumes that the share of public private transport in BPKMs
will continue to be tilted towards private vehicles, with the share declining only marginally
from 53% to 50%. The Net Zero Scenario (NZS), though, envisages this share to drop to 40%.
Technology penetration
Within passenger/freight road segment, EV emerges as dominant choice for decarbonisation
across various vehicle segments. Reflecting the historical growth and upfront cost of EVs,
Current Policy Scenario (CPS) assumes delayed electrification. The Net Zero Scenario (NZS),
however, assumes early electrification with supportive policies and finance. As the study
projects long into future (2070), it has to account for difference in pace of electrification.
These two scenarios also assume greater adoption of CNG in passenger segment and LNG in
freight segment till 2047. However, under Net Zero Scenario (NZS), share of CNG declines
and is replaced by Compressed Bio-Gas (CBG) after 2047, driven by need to reduce total
emissions. The NZS also assumes a greater share for hydrogen fuel cell vehicles among
Heavy Commercial Vehicles (HCVs), with important role of flex-vehicles, strong-hybrids,
CBG vehicles with a greater thrust on biofuels by the government.
In the aviation sector, under Net Zero Scenario (NZS), the international operations are set
to achieve 1% Sustainable Aviation Fuel (SAF) blending by 2027, 2% by 2028, and 5% by
2030, with a continued increase to 50% by 2050 and 70% by 2070. Domestically, the blend
is expected to rise from 2% in 2030 to 50% by 2070. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 48
Pathways to 2070: Modelling Transport Demand & Energy Use
In the shipping sector, under Net Zero Scenario (NZS), low-carbon or green methanol blending
in the existing fleet is targeted to start at 1.5% in 2030 and reach 50% by 2070, while low-
carbon or green ammonia is set to begin at 1% in 2035 and reach 50% by 2070.
Base year
The analysis adopts 2023 as the base year, with all available empirical data calibrated and
validated against this reference year. Forward-looking projections are undertaken for the period
post-2023 through 2070, with the modelling horizon commencing in 2025 and results captured
at five-year intervals. 2020 is used as a reference year for presenting historical data to ensure
consistency of results and alignment with reported emissions.
The first projection year is 2025, and accordingly, model outputs are presented from 2025
onward. Results for 2050 are included to assess progress toward development goals and 2070
results represent the long-term Net Zero outcome.
Modelling Limitations
The findings presented in this report have emerged from a scenario-driven, economy-wide
energy climate modelling framework that develops pathways across sectors towards India’s
Net Zero ambitions. Like all long-term models, these findings rest on key assumptions and
methodological limitations, outlined below for proper interpretation:
i. Deterministic Approach for Key Drivers: The model adopts a deterministic framework,
relying on specific projections for GDP growth, population trends, fuel prices and
technology costs. This limits its flexibility to alternative scenarios, such as economic
shocks or rapid cost declines in EVs.
ii. Simplified Demand Methodology: Demand projections link transport activity directly to
GDP and overlook behavioural nudges such as policy incentives or cultural shifts, which
can drive disproportionate growth in sectors such as Electric 2Ws or shared mobility.
This may lead to under- or overestimation of modal shifts.
iii. Exclusion of Inland Water Passenger Travel: Inland water transport, though, offers
efficient, low-carbon potential for future passenger mobility, limited granular data on
ridership, infrastructure, and emissions limit its inclusion in the model.
iv. Limited Technology Options for Aviation: Beyond SAF blending, the model does not
account for potential technological breakthroughs in aviation, such as hydrogen propulsion
or advanced battery-electric short-haul flights.
v. Biofuel Feedstock and Supply Chain Gaps: While biofuel blending is incorporated Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 49
Pathways to 2070: Modelling Transport Demand & Energy Use
in the form of ethanol, biodiesel, SAF, and CBG, the detailed assessment of feedstock
availability, land-use competition, and supply chain logistics is out of the scope of this
study. This may introduce uncertainty in scalable biofuel deployment for the road and
aviation sector.
vi. Overlooking Regional Demand Variations: The model develops national-level
projections, disregarding regional disparities in population density, income levels,
urbanisation rates, and rural-urban divides, which could skew infrastructure needs and
policy recommendations.
vii. Exclusion of Infrastructure investment costs: The estimated investment cost includes
vehicle costs in-terms of cost to the automobile industry, and cost of batteries and EV
charging infrastructures. The cost of infrastructure for road/rail expansion, aviation,
metros, LNG facilities, and hydrogen filling stations is not included in the model,
understating total sectoral capital needs.
Future Enhancements
Future enhancements to this study would be the integration of multiple scenarios of GDP, fuel
prices and technology costs. Inclusion of behavioural nudges in the transport sector would
enable realistic modal shift analysis. Further, there will be linking this model with the supply
chain and land use availability for biofuel potential to resolve the scalability gaps. Inland water
passenger mobility can also be integrated via detailed ridership assessment.
4.2 Activity Projections and Baseline Estimation
4.2.1 Activity Demand (BPKM/BTKM) Methodology Projections
The study adopts the widely accepted methodology of projecting transport demand through
Billion Passenger Kilometres (BPKMs) and Billion Tonne Kilometres (BTKMs). Globally,
the relationship between GDP per capita and per capita mobility (passenger-km per capita)
has been widely observed and analysed by various think tanks, international agencies, and
academic studies. It generally find that as per capita income rises, personal and public mobility
also increases, and that it saturates after a certain level. This is corroborated by global evidence,
seen in Figure 4.2. The projection of transport demand (passenger and freight) is based on
saturation curve model. The model is specified as:
( )
o
S GDP
LN LN * a b
S - S Capita
=+
Where, S is the per capita transport demand and So is the saturation limit considered, and “a”
and “b” are coefficients derived based on historical data. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 50
Pathways to 2070: Modelling Transport Demand & Energy Use
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
Australia Germany Japan United Kingdom India
Passenger Kilo-metres (PKMs) per Capita
Figure 4.2: Historical growth in per capita passenger transport demand (road + rail) in various
countries showing growth followed by saturation
Source: World Bank, ITF
4.2.2 Estimation of Baseline Transport Demand
The Billion Passenger Kilometres (BPKMs) and Billion Tonne Kilometres (BTKMs) data
for rail and air transport is taken from Indian Railways and DGCA. In case of the remaining
categories of roads, metro, pipeline and water transport, the working group deliberated using
the data available across various ministries/departments/agencies before finally using the
available data with assumptions to estimate BPKMs/BTKMs.
The detailed assumptions for estimation are:
Road transport: MoRTH publishes the data on registered vehicles in its annual
reports. The number of registered passenger vehicles is converted into BPKMs using
assumptions of average occupancy of each vehicle (no. of passengers) and annual
utilisation (no. of kms travelled by each vehicle). For freight, the number of registered
vehicles is converted into BTKMs using assumptions of average payload of each
vehicle (quantity of tonnage carried) and annual utilisation (no. of kms travelled of
each vehicle. The detailed assumptions are tabulated in Annexure A.
Metro transport: Daily ridership data is available for operational Metros from
respective metros reports or through literature review. This data, along with average
km travelled, is used to estimate Metro BPKMs.
Water transport: BTKM is calculated for historical years based on fuel consumption
data published by the Directorate General of Shipping. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 51
Pathways to 2070: Modelling Transport Demand & Energy Use
Pipelines: BTKM is estimated based on the discussions with PNGRB, fuel
transported, and average energy consumption.
Using the above assessment, passenger demand is estimated at 6,410 BPKM and freight
demand at 4,661 in BTKM in 2025. As such estimates are not readily available in the public
domain in a consolidated form, this study contributes by establishing a baseline for passenger
and freight transport demand and modal distribution in India. The likely modal split across
various categories is shown in the Figure 4.3 below.
Air, 3, 0%
Rail, 1027,
22%
Pipeline,
170, 4%
Freight Transport Modal Share
in 2025 (btkms)
Road, 3095,
66%
Water, 367,
8%
Air, 258,
4%
Rail, 1088,
17%
Road, 4998,
78%
Passenger Transport Modal Share
in 2025 (bpkms)
Metro, 66,
1%
Figure 4.3: Baseline passenger transport (BPKM) and freight transport (BTKM) demand estimation (2025).
4.3 Results and Discussion
The following results section provides projections for transport energy demand and fuel mix. The
projections are derived using a saturation growth curve model with GDP as a key input parameter.
The analysis is structured into passenger transport and freight transport, providing insights into
mode-wise demand, technology adoption, and associated energy and emission implications.
4.3.1 Passenger Transport: Demand and Modal Shift
BPKMs projections
This study projects India’s passenger transport demand for both Current Policy and Net Zero
scenarios. A global comparison of GDP per capita and PKM per capita (as discussed in figure 4.4)
shows that as economies develop, travel demand rises significantly before it eventually saturates.
In India’s Current Policy Scenario (CPS), the per capita Passenger Kilometres (PKM) is projected
to grow from 4,542 in 2025 to about 14,000 PKM/capita by 2070, reflecting rising incomes,
enhanced mobility infrastructure, and continued urbanization. However, the Net Zero Scenario
(NZS) expects PKM/capita to saturate at around 12,000 by 2070. This reduction is attributed to Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 52
Pathways to 2070: Modelling Transport Demand & Energy Use
active planning strategies, including Transit-Oriented Development (TOD), promotion of shared
mobility, and a stronger emphasis on Non-Motorised Transport (NMT), which collectively reduce
dependency on private Motorised travel even as GDP per capita rises.
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
20102020203020402050206020702010202020302040205020602070
Passenger Kilometres per Capita
0
4,000
8,000
12,000
16,000
20,000
24,000
Billion Passenger-Kilometres (BPKMS)
Current Policy Scenario Net Zero ScenarioCurrent Policy Scenario Net Zero Scenario
Figure 4.4: Projected growth in billion passenger-kilometres (BPKMS) and per- capita passenger
kilometres (PKMS)
Figure 4.5 provides a useful reference to assess how India’s mobility demand compares globally.
In 2023, India is at the lower end of both GDP per capita and PKM per capita, reflecting limited
personal mobility compared to developed nations. International trends clearly show a positive
correlation between income and mobility, with PKM per capita rising as economies grow, before
gradually saturating.
Australia
France
Germany
Spain
Japan
Italy
United Kingdom
United States
Thailand
Vietnam
India (2023)
0
5,000
10,000
15,000
20,000
25,000
0 10,00020,00030,00040,00050,00060,00070,00080,000
Passenger Kilometres (PKM) per Capita
GDP Per Capita, PPP (constant 2021 Int'l $)
Figure 4.5: Global comparison of GDP/capita vs PKM/capita highlighting that mobility increases
with rising income levels Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 53
Pathways to 2070: Modelling Transport Demand & Energy Use
Both the Current Policy Scenario (CPS) and Net Zero Scenario (NZS) project India to transition
to a high-income quadrant by 2070. The CPS trajectory aligns with higher-mobility European
country such as France and Italy, while the NZS projects similar income levels, but with
lower transport intensity, indicating a deliberate shift toward more efficient and sustainable
mobility choices. This is consistent with the saturation value for PKM per capita assumed for
India, which lies in the range of 12,000 to 15,000 PKM/capita levels observed in European
economies and the ~20,000 PKM/capita level observed in United States. The latter has a higher
saturation level primarily due to greater private vehicle ownership and longer average travel
distances, driven by its vast geographical spread and car-dependent transport.
India’s future trajectories under Current Policy Scenario (CPS) and Net Zero Scenario (NZS)
illustrate how policy and planning can shape mobility outcomes, ensuring that economic
prosperity does not necessarily translate into excessive transport intensity. Instead, strategic
measures such as Transit-Oriented Development (TOD), shared mobility, and Non-Motorised
Transport can enable equivalent or better accessibility with lower per-capita travel demand,
supporting sustainability without constraining economic growth.
Modal shift
India’s passenger transport landscape is projected to undergo a gradual modal shift away from
road-based travel. Road transport, which had with a 78% share in 2025, is expected to decline
to 70% under the Current Policy Scenario (CPS) and to 64% under Net Zero Scenario (NZS)
pathway as other modes of transport gain ground (Figure 4.6).
Rail: After decades of declining modal share, rail is projected to recover slightly, supported
by doubling of India’s rail track length by 2047 and service efficiency improvements.
Under the CPS, rail’s share increases modestly from 17% in 2025 to 20% by 2070
In the NZS pathway, greater policy push and investment take the share of rail
transport to 25% by 2070, offering a cost-effective and lower-emission backbone
for medium- and long-distance travel. This is also in line with National Rail Plan
projections where passenger demand rises from 6.9 billion in 2024 to 19.2 billion
by 2051.
This shift also assumes an increase in average passenger lead distance from 150 km
in 2024 to ~300 km by 2070, supporting higher utilization.
Urban Metro & Rapid Transit: Urban rail networks expand substantially alongside intercity
rail:
Metro systems grow from ~1,000 km in 2025 to ~3,600 km under Current Policy
Scenario (CPS) and ~5,000 km under and Net Zero Scenario (NZS) by 2047, assuming
~120 km/year (CPS) and ~180 km/year (NZ) of new network additions. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 54
Pathways to 2070: Modelling Transport Demand & Energy Use
Aviation: Under both Current Policy and Net Zero Scenarios, air travel’s modal share increases
from 4% in 2025 to ~7% by 2047 before stabilizing. However, absolute demand continues
to grow rapidly with rising incomes, mirroring patterns in upper-middle-income countries
like China and Brazil. Managing emissions will require parallel decarbonisation measures,
including SAF adoption and airport electrification.
What this means:
Current Policy Scenario (CPS) sees incremental modal rebalancing, while Net Zero
Scenario (NZS) accelerates structural change by strengthening rail and metro systems.
International precedents (Japan, Europe) support the feasibility of maintaining higher rail
and metro shares, reinforcing this pathway for India.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2020 202520502070
Modal Share: Passenger Transport
Road Rail Air Metro
CPS NZS CPS NZS
Figure 4.6: Modal shift projections of passenger transport under Current Policy Scenario (CPS)
and Net Zero Scenario (NZS)
Passenger Transport: Public vs Private and Vehicle Ownership
Public- Private Mix within Road Transport
India’s road transport mix is also expected to markedly shift toward public modes. Private
vehicles, comprising two-wheelers and cars, accounted for 53% of road-based passenger
movement in 2025. The share of public transport is projected to rise to 50% (CPS) and 60%
(NZS) (see Table 4.2), enabled by sustained expansion of public transport such as buses, taxis,
and three-wheelers. Key enablers include the continued rollout of schemes such as the PM-
eBus Sewa, which aims to deploy 10,000 e-buses across 100 cities, and state-led programmes Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 55
Pathways to 2070: Modelling Transport Demand & Energy Use
promoting integrated urban mobility. Investments in digital ticketing, feeder connectivity,
and shared mobility services are also expected to improve convenience and affordability,
encouraging a shift away from private ownership. Globally, similar transitions are seen in
cities like Bogotá and Seoul, where dedicated bus rapid transit (BRT) systems and multimodal
integration have played a catalytic role in reversing private vehicle dependence.
Table 4.2: Modal share–road transport projections under CPS & NZS, 2070
Current (2025)Current Policy Scenario (2070)Net Zero Scenario (2070)
Private Vehicles 53%50%40%
Public47%50%60%
Personal Vehicular Ownership
India’s vehicle ownership is set to rise sharply by 2070, driven by income growth, urbanisation
and rising aspirations. This trend presents challenges for urban transport systems, particularly
with respect to congestion, energy use, and emissions, highlighting the need to better align
mobility growth with sustainable transport modes.
As of 2022, India had 322 million registered vehicles (MoRTH), dominated by two-wheelers
(81.6%), followed by cars (14%). While there is significant growth in passenger vehicle sales
from 16.9 million (2022) to 22.89 million (2024), the share of two-wheeler sales fell from 84%
of the total in 2019 to 78.5% in 2024 (SIAM), indicating a slow shift toward four-wheelers
and shared mobility.
Private vehicle ownership reached 197 (167 two-wheelers and 30 cars) per 1000 person in
2023. By 2070, cars per 1000 are expected to grow from 30 per 1000 person to 250 per 1000
in Current Policy Scenario (CPS) (Table 4.3). In Net Zero Scenario (NZS), the growth is lower,
200 per 1000, because of the focus on public transport. These trajectories are conservatively
specified and remain below levels observed in developed economies (e.g., ~850 per 1,000 in
the US and ~400 in Brazil). This reflects India’s urban density, infrastructure capacity, income
distribution, and a policy orientation toward public transport, shared mobility, and compact
urban development, rather than convergence toward high private car dependence. The effects
of rising vehicle ownership can already be observed in major metropolitan areas. For example,
Bengaluru, with 2.31 million cars and 188 cars per 1,000 people in 2023, experiences persistent
congestion, illustrating the importance of strengthening public transport systems and managing
demand to support more sustainable urban mobility. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 56
Pathways to 2070: Modelling Transport Demand & Energy Use
Table 4.3: Vehicle ownership projections
Personal Vehicle Ownership Projections (per 1000 Population)
2023
NITI Aayog (2050/70)
TERI (2050)
IEA (2050)
Current Policy
Scenario
Net Zerio
Scenario
STEPS
ii
APS
iii
2-Wheeler 167
290 (2050)
270 (2070)
290 (2050)
220 (2070)
300 275 250
4-Wheeler 30
170 (2050)
250 (2070)
130 (2050)
200 (2070)
200 140 100
4.3.2 Freight Transport: Demand and Modal Shift
BTKMs projections
India’s freight transport growth is closely tied to its economic development, with rising incomes and
industrial expansion driving increased demand for movement of goods. In 2025, Tonne Kilometres
(TKM)/Capita stood at 3,300, with total freight transport reaching 4,661 BTKMs. Under Current
Policy Scenario (CPS) , TKM/Capita is projected to increase nearly 3 times to 10,000 by 2070.
In contrast, Net Zero Scenario (NZS) anticipates a slightly lower growth to 8,000 TKM/Capita,
influenced by sustainability-driven policies that promote efficient logistics, rail freight expansion,
electrification, and multimodal transport solutions (See Figure 4.7).
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2010202020302040205020602070
20102020 20302040 205020602070
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Billion Tonne-Kilometres (BTKMS)
Tonne-Kilometres (TKMS) per capita
Current Policy Scenario Net Zero Scenario
Current Policy Scenario Net Zero Scenario
Figure 4.7: Projected growth in freight transport demand under Current Policy Scenario and Net
Zero Scenario till 20270
ii STEPS (Stated Policies Scenario): Reflects the trajectory of the energy system under governments’ existing and explicitly
announced policies and measures.
iii APS (Announced Pledges Scenario): Assumes all announced climate and energy pledges, including long‑term net‑zero
targets, are achieved in full and on time. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 57
Pathways to 2070: Modelling Transport Demand & Energy Use
Global trends show that freight movement generally rises with GDP per capita (Agriculture+
Industry), but the correlation is not uniform (See Figure 4.8) and is influenced by factors
such as geography, economic structure, and transport efficiency in shaping freight demand.
Countries like the US and Australia have high tonne-kilometres per capita due to dispersed
geographies and long-haul freight needs, while European nations have lower freight intensity
despite high GDP, reflecting compact economies and efficient logistics. In Asia, China’s high
TKM per capita relative to its GDP highlights its freight-heavy industrial model.
Australia
France
GermanySpain
Japan
Italy
United Kingdom
United States
Thailand
Vietnam
China
India (2023)
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
0 10,00020,00030,00040,00050,00060,00070,00080,000
TKM per Capita
GDP per Capita, PPP (constant 2021 Int'l $)
Figure 4.8: Global comparison of Freight demand per capita as a function
of Income (GDP per capita)
Modal shift
India’s freight mix will change differently under the Current Policy Scenario (CPS) and Net
Zero Scenario (NZS) pathways, influenced by investments, policies, and decarbonisation
priorities. Road freight remains the main mode in both scenarios but gradually loses share.
Under CPS, road’s share declines slightly from 66.4% in 2025 to 65.4% by 2070, reflecting
a continued reliance on road-centric logistics typical of developing economies. In contrast, in
the NZ scenario, road’s share drops more substantially to 60% by 2070, as rail and waterways
gain a larger share due to sustained policy support and infrastructure expansion (Figure 4.9).
Rail: Rail freight is expected to have a modest but meaningful recovery compared to its
historical decline.
Under Current Policy Scenario (CPS), rail’s share rises from 22% in 2025 to 25%
by 2070, driven by DFCs, higher train speeds, terminal modernization, and tariff
rationalization. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 58
Pathways to 2070: Modelling Transport Demand & Energy Use
Under Net Zero Scenario (NZS), rail share goes up to 30% by 2070, supported by
better efficiency and the inherent energy and carbon advantages of rail for long-haul
logistics.
In absolute tonnage, Current Policy Scenario (CPS) and Net Zero Scenario (NZS) project 4.7-
5.2 BT by 2050, aligning closely with Scenario 4 of the National Rail Plan, which assumes
moderate tariff reductions. However, these remain below the plan’s most ambitious scenarios
(6.1-6.8 BT), which would require even greater interventions like faster train speeds, further
tariff rationalization, and integrated multimodal logistics networks.
National Rail Plan - 2030
The National Rail Plan (NRP) 2030 aims to create a ’future-ready‘ Indian Railway system,
focusing on increasing the freight modal share to 45%, reducing transit times, and building
capacity to meet demand through 2050.
Key strategies include 100% electrification, multi-tracking of congested routes, upgrading speeds
to 160 kmph on Delhi–Howrah/Delhi–Mumbai and 130 kmph on other Golden Quadrilateral/
Golden Diagonal routes, and eliminating all level crossings on these corridors. The plan also
identifies new Dedicated Freight Corridors and High-Speed Rail Corridors, assesses rolling stock
and locomotive requirements, and encourages sustained private sector participation in operations,
terminals, and infrastructure development
Waterways: Maritime Amrit Kaal Vision 2047 targets a fourfold increase in port capacity from
2,700 to 10,000 MMTPA and cargo handling growth from 109 MMTPA to 500 MMTPA by
2047. As a result, freight movement over waterways, is expected to quadruple by 2047 and then
stabilise through 2070. Consequently, waterways’ share stays around 8% in both scenarios.
Pipelines: They evolve differently across scenarios.
Under Current Policy Scenario (CPS), higher reliance on fossil fuels leads to a
doubling of PTKM by 2070, maintaining a ~2% modal share.
Under Net Zero Scenario (NZS), pipeline volumes remain broadly stable but shift
toward low-carbon fuels, while the modal share declines slightly to ~1.5% by 2070
as fossil fuel-based transport reduces.
This means that CPS delivers only incremental modal shifts, leaving road as the dominant
mode and limiting efficiency gains while NZS achieves a more transformative rebalancing,
with rail and waterways playing a much larger role, aligning India’s freight decarbonisation
with global best practices in the EU, China, and Switzerland. Greater alignment with the
most ambitious National Rail Plan scenarios could unlock even higher freight rail potential,
positioning it as the low-carbon backbone of India’s logistics network. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 59
Pathways to 2070: Modelling Transport Demand & Energy Use
Air: Air transport currently plays a limited role in India’s freight movement, accounting
for about 1.82 BTKMs in 2023, or approximately 0.04% of total freight activity. Air freight
is projected to remain a niche mode, accordingly, its share in overall freight transport is
expected to stay well below 1% under both the CPS and NZS through 2070, with growth
in absolute volumes largely constrained to specific cargo segments such as express delivery,
pharmaceuticals, and electronics.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2020 202520502070
Modal Share: Freight Transport
Road Rail Air Water Pipeline
CPS NZS CPS NZS
Figure 4.9: Modal shift projections of freight transport till 2070 under Current Policy Scenario
(CPS) and Net Zero Scenario (NZS) highlighting increase in rail share
Freight Transport: Vehicle Ownership
India had approximately 1.5 crore registered freight vehicles in 2022. Of these 59% had
payload capacity up to 3.5 tonnes, 6% had 3.5-12 tonnes, and 35% above 12 tonnes. According
to SIAM data, about one million new freight vehicles were sold domestically in 2024.
79
Freight vehicles up to 3.5 tonnes, which currently dominate the market, experience the fastest
growth in both scenarios due to rising demand for last-mile delivery and urban logistics. Under
Current Policy Scenario (CPS), they are expected to increase from 7 per 1000 people in 2025
to 30 per 1000 by 2050 and 36 per 1000 by 2070. In the Net Zero Scenario (NZS) pathway,
their growth is expected to reach 40 per 1000 by 2070. Medium freight vehicles (3.5-12 tonnes)
grow more moderately, from 0.7 in 2025 to 6.8 (CPS) and 7.5 (NZS) per 1000 people by
2070, supporting regional and mid-distance logistics. Heavy-duty freight vehicles (above 12
tonnes) grow from 2.4 to 6.4 per 1,000 people (CPS) and 4 per 1000 people (NZS), reflecting
a strategic shift towards rail and low-carbon alternatives for long-haul freight movement in a
sustainable transport future (Table 4.4). Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 60
Pathways to 2070: Modelling Transport Demand & Energy Use
Table 4.4: Freight vehicle ownership projections 2070 (per 1000 population)
Freight Vehicle Ownership Projections 2070 (Per 1000 Population)
Current (2025)
Current Policy
Scenario (2070)
Net Zero Scenario
(2070)
< 3.5 Tonnage73640
3.5–12 Tonnage0.76.87.5
> 12 Tonnage2.46.44
Total10.149.251.5
When compared to global benchmarks, India’s projected freight vehicle density by 2070
remains below today’s U.S. and EU levels. The EU has about 80 commercial vehicles per
1,000 people, while the US has a higher density of ~89 commercial trucks per 1,000 population
(excluding SUVs and pickups).
By contrast, India currently has ~10 commercial vehicles per 1,000 people at last count (2025),
which is among the lowest ownership rates globally. India’s projected 2070 levels of 49 per
1000 under Current Policy Scenario (CPS) and 52 per 1000 under Net Zero Scenario (NZS),
with the marginally higher level under NZS reflecting a greater presence of light commercial
vehicles and service-oriented fleets enabled by improved infrastructure, stronger inter-city
connectivity, and more integrated urban systems.
The Net Zero Scenario emphasises a balanced logistics model, where light and medium-duty
vehicles grow strongly to support urban and regional deliveries, while heavy-duty trucks
remain constrained due to a deliberate modal shift toward rail and waterways for long-haul
freight. This approach mirrors European multimodal logistics systems, which rely less on
heavy trucks despite high overall freight volumes.
4.3.3 Technology Transitions: Electrification, Gas, and Alternative Fuels
Electrification of passenger and freight transport
Global & Domestic EV Landscape: Global EV adoption is uneven, shaped by national
priorities and infrastructure. China leads with 64% of global electric car sales in 2024,
supported by strong mandates and battery manufacturing. The US and Europe are expanding,
with nations like Norway achieving nearly 80% EV sales. India’s EV ecosystem is at a turning
point, enabled by FAME incentives, reduced GST, and cost competitiveness, though future
adoption hinges on sustained policy, infrastructure, and technological push. However, large-
scale adoption still faces challenges such as high upfront cost, sparse charging infrastructure,
limited technological readiness, high import dependency and lacks consumer awareness.
In this background, projections from NITI Aayog’s scenario analysis illustrate the divergent
Current Policy and Net Zero pathways. While adoption of electric mobility technologies Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 61
Pathways to 2070: Modelling Transport Demand & Energy Use
including its derivatives accelerates across all passenger vehicle categories under NZS,
particularly after 2030, the CPS exhibits a more gradual transition. Even with higher
electrification, there remains a significant role for biofuel compatible vehicles, reflecting the
scale of sectoral growth and the diversity of use-cases, alongside and in combination with the
electric options. This contrast underscores the critical role of policy ambition, infrastructure
rollout, and technology investment in shaping India’s transport decarbonisation trajectory.
Table 4.5: xEV Penetration projections on annual sales for passenger & freight vehicles
till 2070 for Current Policy Scenario (CPS) and Net Zero Scenario (NZS)
Current Policy Scenario Net Zero Scenario
2050 2070 2050 2070
2W100% 100% 100% 100%
3W90% 90% 100% 100%
4W-Cars60% 80% 70% 85%
4W-Taxi60% 80% 95% 95%
Bus80% 80% 90% 90%
Vehicles payload upto 3.5 tonnes60% 80% 90% 95%
Vehicles payload from 3.5-12
tonnes
15% 60% 50% 95%
Vehicles payload above 12 tonnes4% 50% 25% 80%
xEV: Electrified vehicles (generic term for all types of electric vehicles i.e., Battery EV, Strong Hybrid EV, Range Extender EV, Plug-in
Hybrid EV). Within the xEV portfolio, Battery EVs represent the dominant technology in terms of market penetration and deployment
in the study, while other technologies are assumed to be of limited penetration.
Key Enablers & Challenges: Scenarios from analysis by think-tanks suggest early dominance
of two- and three-wheeler EVs due to favourable economics. However, hurdles remain in the
form of high upfront cost, urban charging gaps, reliance on coal-based electricity, and critical
mineral supply risks. To ensure a secure and sustainable transition to EVs, investment in public
charging, diversification of battery supply chains, and R&D in alternative chemistries must
be scaled. Energy security is another major concern as a dependence on critical minerals,
especially lithium, cobalt, etc. poses strategic risks. India will need to secure diversified supply
chains, invest in recycling ecosystems, and promote research in alternative chemistries like
sodium-ion or Lithium Iron Phosphate (LFP) batteries to address these risks.
Role of natural gas
The share of CNG/ LNG in India’s transport sector particularly in cars, buses, taxis and
trucks is expected to rise steadily until around 2047, after which it is expected to plateau.
In the medium term, CNG/LNG is being leveraged as it offers lower emissions compared to
traditional petrol and diesel, especially in urban public transport systems and high-mileage
commercial fleets. For India, natural gas plays a vital role in reducing local air pollution and
enhancing energy affordability while providing an immediate decarbonisation pathway during
the ramp-up of electric and hydrogen-based mobility ecosystems. However, post 2047, the Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 62
Pathways to 2070: Modelling Transport Demand & Energy Use
strategic emphasis is expected to shift decisively toward zero-emission technologies, in line
with India’s Net Zero vision. Natural gas share in transport is projected to decline as EVs reach
cost parity, green hydrogen becomes more accessible, and ethanol-powered flex hybrids and
battery-electric models expand across all vehicle classes. It is also important to decarbonise
the grid from the present ~76.8% share coming from fossil origin.
This trajectory mirrors global energy strategies, where natural gas, including Compressed
Natural Gas (CNG) and Liquefied Natural Gas (LNG), is increasingly seen as a clean
alternative. Countries like the United States, Italy, and China have scaled CNG deployment
primarily in urban public transport and freight fleets to reduce particulate emissions and meet
interim climate targets. However, beyond 2040, as battery electric vehicles (BEVs) and fuel
cell technologies mature and infrastructure scales up, the role of natural gas is expected to
taper with scale-up of Compressed Bio-Gas (CBG) re-purposing the existing infrastructure.
Role of Alternate Fuels
Hydrogen fuel cell technology is being considered as an option for heavy-duty mobility
and longer-range applications. Japan and South Korea have spearheaded national hydrogen
strategies, with OEMs like Toyota (Mirai) and Hyundai (Nexo) commercialising fuel cell
passenger vehicles, while also pushing fuel cell buses and trucks for logistics and transit
sectors. Germany is investing in hydrogen corridors and refuelling infrastructure to support
fuel cell deployment in commercial fleets. However, challenges around hydrogen production
costs, infrastructure rollout, and vehicle affordability remain key bottlenecks for mass adoption.
Similarly, flex-fuel hybrid vehicles have been integral to Brazil’s transport decarbonisation
story. With over 85% of light-duty vehicles being flex-fuel compatible, Brazil has successfully
leveraged domestic ethanol production to reduce oil imports and transport-sector emissions.
These hybrids are now being adapted with electrified powertrains, creating a powerful synergy
between biofuels and electrification.
In India, the push toward fuel cell and ethanol-based technologies is gradually strengthening,
driven by a dual imperative, reducing oil imports and ensuring energy diversification, in the
mobility sector. The government has initiated pilot projects on green hydrogen-powered buses,
notably in cities like Delhi and Pune, and is incentivising R&D on fuel cell stacks under the
National Hydrogen Mission. Concurrently, major OEMs, including Toyota and Maruti Suzuki,
are exploring flex-fuel hybrid models tailored to Indian conditions. The Ministry of Road
Transport and Highways (MoRTH) has mandated that vehicles sold in India be compatible
with E20 fuel (20% ethanol blend), while promoting the transition toward E100-ready flex-
fuel engines, which can achieve near-zero lifecycle emissions.
India’s Net Zero Scenario (NZS) envisions the emergence of hydrogen fuel cell vehicles
(HFCVs) and flex-fuel hybrids as complementary solutions to BEVs, especially in segments Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 63
Pathways to 2070: Modelling Transport Demand & Energy Use
where electrification faces technological or infrastructural constraints. By 2070, hydrogen
based buses and heavy commercial trucks are expected to account for up to 5% and 20%
respectively of the overall sales respectively in NZS, offering a low-emission alternative
particularly suitable for long-range and high-utilisation applications, versus limited penetration
in Current Policy Scenario (CPS). Likewise, flex-fuel cars, designed to run on 100% ethanol,
are projected to constitute around 10% of car sales share by 2050 under the NZS and
saturate thereafter
iv
. These vehicles combine internal combustion engines (ICE) optimised
for ethanol, providing both energy flexibility and near-zero lifecycle emissions when powered
by sustainable biofuels.
As battery electrification accelerates, fuel cell and flex-fuel hybrid technologies will serve as
critical enablers of a diversified, resilient, and inclusive clean mobility transition. Together,
they form part of a broader technological portfolio that can deliver on India’s long-term goals
of energy security, industrial competitiveness, and deep decarbonisation in transport. It is also
expected that India’s renewable energy capacity will have enhanced substantially to be able
to decarbonise the grid and offer green power for green hydrogen manufacture in both NZS
and CPS.
4.3.4 Transport Energy Demand
India’s passenger and freight transport sectors consumed total of 137 Mtoe energy in 2025.
It is noteworthy that the average intensity of passenger transport (11.5 toe per million PKM)
and freight transport (14.0 toe per million TKM), aligns with global averages at 12–14 toe
per million PKM and 14–17 toe per million TKM respectively.
As mobility expands, overall transport energy use increases in the medium term and
subsequently moderates toward 2070 as the transport system evolves. In the Current Policy
and Net Zero scenario total final transport energy reaches 335 Mtoe and 250 Mtoe respectively
by 2050, and further declines to 307 Mtoe and 192 Mtoe by 2070. The evolving fuel break-
up underlying these trajectories is also illustrated in Figure 4.10/ Table 4.6 and discussed in
the subsequent section.
Against an almost fourfold increase in passenger and freight demand (BPKMs and BTKMs)
by 2070, transport energy use increases by only about 2.2 times under Current Policy Scenario
(CPS). While under Net Zero Scenario (NZS), even as BPKMs and BTKMs grow by more
than three times, total energy use is moderated to only about 1.4 times in 2070 compared to
2025 level. These trends reflect the efficiency dividend from electrification, modal shift toward
public and rail-based transport, and improved vehicle technologies, as shown in Figure 4.11.
80
iv Beyond 2055, FFVs are assumed to operate on pure ethanol (near 100% ethanol), and CBG vehicles are assumed to
operate on pure Compressed Bio-Gas. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 64
Pathways to 2070: Modelling Transport Demand & Energy Use
0
50
100
150
200
250
300
350
400
CPS NZS CPS NZS
2020 202520502070
Million Tonnes Oil Equivalent (Mtoe)
ATFGasolineDiesel
Fuel OilCNG/LNG/CBG/GH2GH2 Derivatives (Shipping)
Ethanol/Biodiesel/SAF Electricity
Figure 4.10: Transport energy demand under Current Policy Scenario (CPS) and Net Zero
Scenario (NZS) until 2070 in Million Tonnes of Oil Equivalent (Mtoe)
The lower transport energy use in Net Zero Scenario (NZS) is a result of multiple factors;
Transport Demand driven by Transit-Oriented Development (TOD), Modal Shift, share of
public and private vehicles in road transport, fuel efficiency and technology shift. Under
TOD, reductions also come from promoting shared mobility and prioritising Non-Motorised
Transport (NMT), supported by proactive planning strategies that collectively reduce reliance
on private Motorised travel and, consequently, reduction in energy consumption as compared
to Current Policy Scenario.Mil Milon T esOEoquv M Milon TesOEquvsa M Milon TesOE Milon TeslOeE M Milio Mil Million Tonne os Oil Equivalent (Mtoe) M Mi Mii Mil Mii Mil Mii Mil
Figure 4.11: Drivers for lower energy use in Net Zero Scenario (NZS) by 2070 compared to
Current Policy Scenario (CPS) Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 65
Pathways to 2070: Modelling Transport Demand & Energy Use
This transition hinges on the successful implementation of India’s CAFE norms (see Box
below). The progressive extension of fleet-wide CO₂ standards under CAFE III (91.7 g/km)
and IV (70 g/km) provides the regulatory foundation for the efficiency gains. Additional
wedges come from modal shift (20%) as passenger trips and freight tonnes move toward buses/
metro/rail and waterways, while demand moderation (13%), through compact urban form,
telework, pricing, and better land-use, caps vehicle-kilometre growth. Technology shift leads
to 53% reduction, majorly due to electrification, while operational improvements (3%) deliver
additional reductions through eco-driving, higher load factors, and logistics optimisation.
CAFE Norms – Driving Efficiency in the Road to Net Zero
India’s Corporate Average Fuel Efficiency (CAFE) norms represent a critical regulatory tool for
reducing fuel consumption and tailpipe CO₂ emissions in the passenger vehicle segment. Notified
under the Energy Conservation Act and administered by the Bureau of Energy Efficiency (BEE),
CAFE norms set manufacturer-level, sales-weighted average CO₂ emission limits for new passenger
cars sold in India, indexed to the vehicle’s unladen weight. India’s framework includes super-credits
(e.g., counting each EV as multiple vehicles for compliance), and derogation factors for off-cycle
technologies like start-stop systems, regenerative braking, and efficient transmissions. However, these
should be progressively phased out to maintain the integrity of actual emission reductions.
Introduced in 2015, the first cycle (CAFE 1, 2017-22) targeted an average CO₂ emission level
of approximately 130 g/km for average weight of 1037 kg (based on MIDC cycle), which was
tightened to 113 g/km under CAFE II by 2022–23. CAFE norms use a mass-based linear equation
for calculating the corporate average CO₂ target:
Corporate Average Target CO₂ = a + b × (M − Mo)
0
20
40
60
80
100
120
140
2025203020352040204520502055206020652070
CAFE Trajectory on New Sales
(Without Derogation Factor)
Current Policy Scenario Net Zero Scenario
grams CO
2
per kilometre Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 66
Pathways to 2070: Modelling Transport Demand & Energy Use
As per the Net Zero pathways modelling, India’s CAFE trajectories are illustrated in the adjacent
chart, which shows a linear reduction of fleet CO₂ emissions. This pathway implicitly assumes a
sharp increase in the market share of zero-emission vehicles (ZEVs)— reaching 100% ZEV sales
by around 2055 to allow fleet-level emissions to taper to zero by 2070. Beyond 2055, FFVs are
assumed to operate on pure ethanol (near 100% ethanol), and CBG vehicles are assumed to operate
on pure Compressed Bio-Gas. Further, CAFE should incentivise the adoption of light weight,
fuel‑efficient, smaller entry‑level cars as is increasingly the case in leading global markets, while
also accounting for the lifecycle emissions benefits and carbon sequestration potential associated
with sustainable biofuels.
To ensure that CAFE norms remain credible and future-ready, India must adopt a time-bound
plan to sunset the relaxations and shift toward true lifecycle-zero vehicles. Doing so will not only
align with the modelled Net Zero pathway but also prepare the domestic auto industry for global
low-emission export standards.
a = baseline CO₂ coefficient (g/km), b = slope coefficient (g/km/kg), M = sales-weighted average kerb mass of the OEM fleet (kg),
Mo = reference mass (e.g., 1170 kg in the draft CAFE III)
Transport Energy Demand and Fuel Mix
Currently, nearly 93% of energy used in India’s transport sector is from petroleum products
and gas. Under the Current Policy Scenario (CPS), the system remains fossil-heavy: by 2050,
over three-fourth of supply is still fossil, and even by 2070 fossil fuels remain at 64% of the
transport energy mix.
Table 4.6: Projections of fuel demand under Current Policy Scenario and Net Zero Scenario by 2050 & 2070
Fuel Type 2025
20502070
Current Policy
Scenario
Net Zero
Scenario
Current Policy
Scenario
Net Zero
Scenario
Aviation Turbine Fuel
(ATF)
8% 16% 17% 21% 21%
Petrol 20% 10% 5% 3% 0%
Diesel56% 34% 26% 22% 0%
Fuel Oil1% 1% 1% 0% 0%
CNG/LNG/CBG/GH2 8% 18% 17% 22% 10%
v
GH2 Derivatives
(Shipping)
0% 0% 1% 0% 4%
Ethanol/Biodiesel/SAF4% 7% 13% 8% 20%
Electricity 2% 14% 19% 24% 45%
Total Energy (Mtoe) 137 335 250 307 192
Under Net Zero Scenario (NZS), however, the mix pivots decisively toward low-carbon
carriers after 2050. By mid-century, electricity, biofuels, and hydrogen collectively account
for almost half of transport energy use, rising to nearly 80% by 2070. Petroleum products
v consists only clean fuels Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 67
Pathways to 2070: Modelling Transport Demand & Energy Use
phase out almost entirely from road transport, leaving Aviation Turbine Fuel (ATF) as the
main residual fossil fuel – highlighting the difficulty of decarbonising aviation (Refer Figure
4.10 and Table 4.6).
With a decisive shift away from import dependent oil and gas, Net Zero signals reduced
exposure to oil-price shocks and improves macro stability – an effect emphasised in the World
Economic Outlook (WEO 2023)
81
and broader literature linking clean energy uptake with
reduced price volatility risks.
Gas as an alternative fuel: India’s transport sector is expected to see CNG and LNG grow
steadily until around 2050, serving as an effective bridge fuel for urban buses, taxis, and
high-mileage freight fleets. This growth helps cut local air pollution and reduce costs while
the ecosystems for electric and hydrogen-based mobility scale up.
The long-term trajectory of natural gas in transport diverges depending on policy choices. In
Current Policy Scenario (CPS), gas demand is expected to rise, potentially reaching 65 Mtoe
by 2070, which risks locking in fossil assets and slowing the transition.
By contrast, in Net Zero Scenario (NZS), natural gas consumption in transport is projected to
peak at about 32 Mtoe around 2045, plateaus briefly, and then transitions to clean fuels i.e.,
CBG as battery-electric, fuel-cell vehicles, and ethanol-ready flex hybrids reach cost parity
and their infrastructure expands. In this scenario, only Bio-CNG/CBG continues beyond 2055,
serving hard-to-electrify heavy-duty vehicles and passenger vehicles.
India’s strategic emphasis must therefore shift decisively toward zero-emission technologies,
with gas infrastructure designed for flexible repurposing into EV fast-charging or hydrogen
refuelling hubs, and biomethane.
Natural gas has a valuable but time-limited role in India’s transport transition. It can cut near-
term pollution and costs, while the country builds out EVs, hydrogen, and a cleaner grid.
Greater emphasis can be placed on improving the uptake of CBG which is sustainable and
carbon-neutral/negative fuel.
82
EV Systems Planning: The electricity demand is projected to rise to 48 Mtoe in Net Zero
Scenario (NZS) and 47 Mtoe in Current Policy Scenario (CPS) by 2050. Even with higher
electrification under NZS, the demand is nearly similar to CPS due to lower travel demand in
NZS. Both CPS and NZS implies a substantial increase in electricity demand from transport
sector, underscoring the need for robust distribution upgrades and widespread depots/fast-
charging for trucks and buses, managed charging and time-of-use signals to flatten peaks.
Moreover, share of renewable energy should also increase in primary energy mix. Since RE
does not have the conversion losses typically seen in thermal power, this would mean that
electrification of mobility sector shall have relatively lower impact on overall primary energy
demand going into the future. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 68
Pathways to 2070: Modelling Transport Demand & Energy Use
Hydrogen’s targeted role after 2040: Hydrogen use under Net Zero Scenario (NZS) increases
to about 3 million tonnes by 2050 and about 8 million tonnes by 2070. This includes green
hydrogen derivatives consumed in shipping sector (E-methanol and Green Ammonia) of 0.9
million tonnes by 2050 and 2.9 million tonnes by 2070. This aligns with Global views that
long-haul trucking, shipping (via ammonia), and synthetic fuels are prime early demand sectors
in transport. This will require a high capacity of electrolysers and renewables.
Aviation as last challenging frontier: Aviation dominates the remaining liquid fuel component
in Net Zero Scenario (NZS). ATF demand is projected at 43 Mtoe in 2050 and slightly
decreases to 40 Mtoe in 2070. This is consistent with global literature identifying aviation as
among the hardest modes to decarbonise rapidly and therefore reliant on liquid fuels and SAF.
Biofuels: India’s experience over the past few years shows how quickly policy, supply-chain
readiness, and demand alignment can scale a clean energy solution such as biofuel. India’s
rapid ethanol scale-up provides the launchpad. From a negligible base a decade ago, nationwide
blending rose to 20% in mid-2025, five years ahead of the original 2030 target. The next step
is to extend this experience beyond gasoline blending into the wider family of sustainable fuels.
0
5
10
15
20
25
2020 2025 2050 2070
Ethanol
0
10
20
30
40
2020 2025 2050 2070
Sustainable Aviation Fuel
Current Policy Scenario Net Zero ScenarioCurrent Policy Scenario Net Zero Scenario
0
2
4
6
8
10
12
14
16
2020 2025 2050 2070
Biodiesel, bn litres
CPSNZS
0
5
10
15
20
25
2020 2025
BioCNG, bmscm
CPSNZS
Billion LitresBillion Litres
Figure 4.12: Biofuel demand under Current Policy Scenario and Net Zero Scenario by 2050 and 2070
Under Current Policy Scenario (CPS), biofuel is primarily used for road transport. Ethanol
peaks at about 20 billion litres in 2050 and drops to 13 billion litres in 2070. This decline after
2050 is due to increased electrification in transport sector. In contrast, under Net Zero Scenario
(NZS), ethanol plateaus at around 22 billion litres after mid-century. Flex-fuel vehicles act
as a demand-side accelerator here by enabling operation on higher ethanol blends (E20–E85/
E100) without range anxiety (Figure 4.12).
Under Current Policy Scenario (CPS), SAF adoption increases from about 8 billion litres in
2050 to 19 billion litres in 2070. While under Net Zero Scenario (NZS), SAF rises from about
13 billion litres in 2050 to 32 billion litres by 2070.
By 2050s, flex-fuel cars designed to run entirely on ethanol are projected to constitute
around 10% of car sales under the Net Zero Scenario (NZS). These vehicles combine internal
combustion engines optimised for ethanol, offering both energy flexibility and near-zero
lifecycle emissions when powered by sustainable biofuels. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 69
Pathways to 2070: Modelling Transport Demand & Energy Use
Biofuel supply potential in India:
India’s ethanol production currently relies mainly on maize (~50%) and sugarcane (~30%), with
the remainder coming from damaged food grains and other sources. According to the NITI
Aayog Crop Husbandry Report on Demand and Supply (2024), by 2047–48, India’s food grain
production is expected to exceed domestic demand, creating a surplus of over 40 million tonnes.
This potential surplus could support ethanol production of more than 16 billion litres, which
would cover a substantial portion of the expected ethanol requirement of around 22 billion litres,
indicating feedstock availability for higher blending goals without compromising food security.
Beyond ethanol, there is also notable potential for other biofuel pathways. For CBG, The
International Energy Agency (IEA) estimates India’s biogas potential at around 87 billion cubic
metres (BCM), suggesting significant scope for gaseous biofuels in transport sector. For SAF, the
Feasibility Study on the Use of Sustainable Aviation Fuels in India (conducted under the ICAO
ACT-SAF Programme) indicates significant potential for developing a domestic SAF industry,
with production estimates cited around 41.5 billion litres.
At the same time, competing biomass uses will persist, requiring careful assessment of trade-offs
related to cost, energy balance, water use, and emissions.
Life Cycle Assessment of Mobility Technologies – Looking Beyond
Tailpipe Emissions
As India accelerates toward its Net Zero goals, it is essential to evaluate transport technologies
not just through the lens of tailpipe emissions, but across their entire life cycle. A Life Cycle
Assessment (LCA) approach provides a comprehensive view of environmental impacts, spanning
vehicle production, fuel or electricity generation, use-phase emissions, and end-of-life treatment.
This is particularly relevant for emerging technologies like battery electric vehicles (BEVs) and
hydrogen based vehicles, whose environmental benefits vary significantly depending on energy
sources and materials used.
BEVs are often labelled as zero-emission vehicles due to their lack of tailpipe (tank-to-wheel)
emissions. However, this is only one component of their environmental footprint. BEVs typically
incur significantly higher emissions during the production phase, particularly from battery
manufacturing, which relies on energy-intensive extraction and processing of critical minerals like
lithium, cobalt, and nickel. When these emissions are added to those from electricity generation
(well-to-tank), especially from a coal-dominated power mix like India’s, the total life cycle
emissions can be substantial. In fact, recent studies from IIT Kanpur and TERI suggest that under
current conditions, BEVs may need to be driven for around 1.5 lakh kilometres to offset their
initial emissions and become environmentally advantageous compared to internal combustion
engine vehicles. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 70
Pathways to 2070: Modelling Transport Demand & Energy Use
Hybrid vehicles, due to their balanced efficiency and lower reliance on high-impact battery
systems, often outperform BEVs under current Indian grid conditions. However, there exists
studies which indicate otherwise. ICCT and IIT Madras studies point that BEVs have lower
emissions even at current grid emission factor on lifecycle basis. Further, a TERI study suggests
that Bio-CNG can be carbon-negative, and that blending it up to 20% with fossil CNG can make
the overall fuel close to carbon neutral on a life-cycle basis
vi
. Considering these mixed and non-
conclusive evidence, NITI Aayog has launched a study on developing lifecycle assessment for
EVs Vs ICEs based on transparent set of assumptions.
It is complex to compare two vehicle models based on their functionality which could differ based
on Power Output, Occupancy, Affordability, Weight, etc. Various literatures that tailpipe-zero
options like BEVs and hydrogen based vehicles only deliver full climate benefits when powered
by clean energy sources. These results could widely differ for different segment of vehicles (small,
compact, and heavy), also based on biofuel belnding scenarios. The above findings highlight a
critical insight: the decarbonisation potential of new mobility technologies is not inherent, but
highly contingent on upstream energy and materials.
A life cycle perspective is essential for designing robust and future-ready mobility policies. It
shows that electrification alone does not guarantee decarbonisation, especially when deployed in
isolation from grid and supply chain reforms. India’s Net Zero strategy should prioritise not just
tailpipe emissions reductions, but system-wide sustainability. This includes diversifying vehicle
technologies based on application, such as BEVs for urban logistics, hybrids for personal and mid-
range mobility, and hydrogen based vehicles for long-haul freight, while strengthening domestic
manufacturing, ensuring circularity through battery reuse and recycling, and rapidly decarbonising
the power and hydrogen supply chains.
vi Indian Institute of Technology Kanpur (IIT Kanpur). Life Cycle Assessment (LCA) and Total Cost of Ownership (TCO) Analyses
of Battery Electric Vehicles (BEVs), Hybrid Electric Vehicles (HEVs), and Internal Combustion Engine Vehicles (ICEVs). Engine
Research Laboratory, IIT Kanpur.
The Energy and Resources Institute (TERI). Comparative Analysis of Electric Vehicles and Internal Combustion Engine Vehicles
from Resource Efficiency Perspective. New Delhi: TERI, 2023.
International Council on Clean Transportation (ICCT) and Indian Institute of Technology Roorkee (IIT Roorkee). Review of
Greenhouse Gas Life-Cycle Assessments of Passenger Cars in India.
Indian Institute of Technology Madras (IIT Madras). Lifecycle Assessment of Electric and Conventional Vehicles in the Indian
Context.
The Energy and Resources Institute (TERI). Comprehensive Environmental and Social Sustainability Assessment of Bio-CNG
as a Vehicular Fuel in India. New Delhi: TERI. 5
CHALLENGES IN
THE TRANSPORT
SECTOR
TRANSITION 72Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport
5
Challenges in the
Transport Sector
Transition
The preceding chapter outlined India’s transport transition trajectory across the Current Policy
Scenario (CPS) and Net Zero Scenario (NZS) pathways, highlighting the scale of transformation
required through electrification, fuel diversification, modal shift, and efficiency improvements.
While these results demonstrate the technical feasibility of a low-carbon transition, they
also underscore that achieving such outcomes will require addressing a set of persistent and
emerging constraints across the transport system.
In this context, this chapter maps the key challenges in India’s transport landscape, structured
into five thematic clusters aligned with the core policy response pillars: (i) Clean Mobility
Transition, (ii) Infrastructure Utilization, (iii) Fuel Diversification, (iv) Systemic Gaps, and
(v) Public Transport & Modal Integration. These challenges are closely aligned with, and
intended to inform, the suggestions proposed for enabling the sector’s Net Zero transition.
5.1 Accelerating the Clean Mobility Transition
I. Insufficient EV Charging Infrastructure
India has only 52 public charging points per million people, compared with 2,540 in China
and 580 in the US
83
. This shortage drives up costs, increases range anxiety, and slows EV
adoption, particularly for high-utilisation fleets that need fast-charging options. Large variation
is observed in electricity price depending on the charging point location. For example, home
charging electricity price varies from 6-10 INR per unit (depending on the time of the day),
while public alternating current (AC) charging varies from 10-14 INR per unit and public
direct current (DC) charging cost varies from 18-22 INR per unit
84
. AC chargers are slow, and
fast DC chargers are expensive and limited. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 73
Challenges in the Transport Sector Transition
II. Different Total Cost of Ownership (TCO) Parity Across Segments
While two-wheeler EVs have achieved Total Cost of Ownership (TCO) parity, heavier vehicles
are yet to do so. Batteries still make ~40% of the total cost of EV
85
, replacement batteries have
18% GST, and outdated Modified Indian Driving Cycle (MIDC) test overstates performance.
This keeps freight and heavier segments unviable.
III. Import-Heavy EV Supply Chain
EVs need six times more minerals than internal combustion engines (IEA, 2021)
86
and India
is dependent on Chinese imports for critical minerals, cells, chips, and power electronics. This
makes India’s EV transition vulnerable to international price shocks and geopolitical risks,
limiting resilience and self-reliance.
IV. Limited Flex-Fuel Vehicle (FFV) Ecosystem
Flex fuels can play a complementary role in the clean mobility transition, particularly in hard-
to-electrify vehicle segments. India’s ethanol blending (19.9% in 2024-25
87
) saved significant
foreign exchange and avoided petroleum imports. However, sparse retail infrastructure for
dispensing E85/E100, pricing challenges, cautious OEMs, low consumer awareness and food
vs. fuel trade-offs in first generation ethanol hinder growth.
V. Zero-Emission Vehicles
vii
(ZEVs) Acceleration
ZEV pathways can together enable diversified, low-emission vehicle options suited to Indian
driving patterns and fuel availability. ZEVs which include Battery Electric Vehicles (BEVs),
Hydrogen, Biofuels (FFVs and CBG) have no mandates in India. Without segment-wise targets
and incentives, penetration remains low.
5.2 Underutilised Infrastructure and Modal Gaps
I. Underutilised Rail Infrastructure and Freight Modal Share
Despite contributing more than two-thirds of the railway revenue, freight uses only ~40% of
network capacity with passenger trains getting precedence
88
. Average freight speeds remain
at ~23.6 kmph due to shared tracks with passenger trains. While Dedicated Freight Corridors
(DFCs) have raised speeds to ~40–45 kmph, their full potential remains unrealised
89
.
II. Weak Private Participation in Rail Infrastructure
vii For the purpose of this study, Zero Emissions Vehicles mean vehicular fleet in which there are Net Zero greenhouse
gas emissions after accounting of emissions throughout the value chain from production, operation, energy supply to
end-of-life. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 74
Challenges in the Transport Sector Transition
Private investment in terminals and wagons is low due to high capex, unclear revenue-sharing,
and regulatory opacity. Without predictable returns, PPP-based modernisation will remain
limited
90
.
III. High-Cost, Low-Ridership Metro Systems
Metro expansion faces significant cost (up to INR 390 Crore/km
91
) and inadequate fare
recovery. Poor last-mile access and land-use integration also supress ridership.
IV. Underutilised Liquefied Natural Gas (LNG) and Gas Infrastructure
Many LNG terminals operate below 50% capacity due to unaffordable prices
92
. Right of Way
(RoW) delays, and low penetration in transport-sector stall growth and prevent a scale-up.
V. Weak Water Transport Infrastructure
Inland waterways and coastal shipping carry 8% of freight despite offering lower costs
per tonne-km than road
93
. Shallow drafts, underdeveloped terminals, and poor multimodal
integration hinder growth.
5.3 Fuel Diversification
I. LNG Trucking Potential for Medium and Heavy Commercial Vehicles
(MHCVs)
LNG is a promising fuel for long-haul freight, releasing lower emissions than diesel. However,
it faces high upfront cost
94
and limited refuelling stations. There are only around 29 refuelling
stations nationwide (13 state owned and 16 private)
95
.
II. Barriers to Sustainable Aviation Fuel (SAF) Adoption
India has sufficient biomass potential for SAF
96
but lacks feedstock collection and refining
infrastructure. SAF is 1.5 times costlier than jet fuel and could promote unsustainable land
use if dependent on first-generation feedstocks
97
. Achieving the 2% blend target by 2030 will
require regulatory streamlining, capital incentives, and decentralised production capacity.
In addition, obtaining regulatory clearances for commercial SAF production can take a year
or longer, creating a significant bottleneck. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 75
Challenges in the Transport Sector Transition
III. Barriers to Decarbonising Air Travel
Electric and hydrogen aircraft offer near zero emissions but face technical and commercial
barriers, especially for long-haul flights due to energy density and battery weight. R&D must
continue, but short-term gains will come from SAF and improved fuel efficiency.
5.4 Strengthening Regulatory Architecture and Circularity
I. Gaps in Circularity and End of Life Vehicles (ELV) Management
India lacks formal End of Life Vehicles (ELV) recycling infrastructure. Informal scrappage
dominates the sector, resulting in the loss of valuable materials and environmental risks
98
.
II. Semi-High-Speed and High-Speed Rail (HSR) Potential
Indian Railways struggles to meet rising demand for air-conditioned services, pushing
passengers to air travel and luxury buses. HSR can provide a high-comfort, low-alternative
option but faces financing, land acquisition, and coordination hurdles
99
.
5.5 Public Transport and Modal Integration
I. Declining Public and Shared Transport Use
Poor service quality and inadequate integration is reducing public transport usage in urban
areas in the face of rising aspirations leading to greater adoption of private vehicles. Metro,
Regional Rapid Transit System (RRTS), and bus systems should expand based on demand
mapping. Last-mile electric feeders, mini-buses, and shared Intermediate Public Transport
(IPT) (e-rickshaws, autos) should be integrated via Unified Metropolitan Transport Authorities
(UMTAs).
II. Paratransit and Intermediate Public Transport (IPT) Regulation
Gaps
Intermediate Public Transport (IPT) modes remain critical in many cities but lack regulation
on safety, fares, and permits. Organising IPT under service and safety standards will improve
reliability and complement formal transit.
III. Neglected Non-Motorised Transport (NMT)
According to a 2011 census, walking and cycling are used by 36% of commuters
100
. However,
these modes still face a lack of investment and infrastructure that hinder more uptake. 6
TOWARDS NET
ZERO TRANSPORT:
KEY POLICY
SUGGESTIONS 78Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport
6
Towards Net Zero
Transport: Key Policy
Suggestions
In 2020, transport sector accounted for about 10% of India’s GHG emissions and 20% of
the country’s total energy consumption. India’s transport sector will require a fundamental
transformation to reach Net Zero Emissions by 2070.
This chapter provides detailed key policy suggestions to achieve this goal, covering various
segments such as urban transport, future-ready freight, pipeline infrastructure, EV ecosystem,
biofuel economy, and more.
The section below provides a snapshot before going into more details for each suggestion.
Table 6.1: At a glance: Pathways for an efficient transport transition
Actions Targets
Reimagining Urban Transport: Sustainability,
Integration, and Equity
Shape urban transport systems around
sustainability, integration, and equity
Future-Ready Freight: Infrastructure, Modal
Integration, and Domestic Manufacturing
Modernise how India moves goods with cleaner
fuels, domestic innovation, and modal integration
Strengthening Pipeline Infrastructure for Clean
Fuel Transition
Position pipelines as efficient, low-carbon energy
backbones for fuel transportation
Accelerating EV Adoption
Scale electrification with infrastructure, clean
energy access, and circularity
Enhancing Energy Efficiency in India’s Transport
Sector
Raise fuel standards, modernise fleets, and keep
market fair
Driving the Biofuel Economy: Innovation,
Security, and Sustainability
Advance biofuels and Sustainable Aviation Fuel (SAF)
to balance climate, energy security, and rural growth
Strengthening Vehicle Retirement and Recycling
Phase out old vehicles and fleets through
scrappage ecosystems and incentives to deliver
quick air quality wins
Promoting Non-Motorised and Active Transport
Expand safe, climate-resilient walking and
cycling infrastructure
Enabling Systemic Transformation: Unified
Governance, Digital Infrastructure, and Policy
Innovation
Align governance, data, regulation, and
innovation for long-term transformation Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 79
Towards Net Zero Transport: Key Policy Suggestions
6.1 Reimagining Urban Transport: Sustainability, Integration, and
Equity
As Indian cities grow in scale and complexity, urban mobility systems must evolve to become
more inclusive, integrated, and environmentally sustainable. The following Suggestions outline
a strategic approach to align infrastructure, governance, and planning with the diverse mobility
needs of a rapidly urbanising population:
i. Strengthen data-driven planning through regular urban household travel surveys to
assess current and latent travel requirements (e.g., last-mile connectivity) that would
guide low-emission transport investments in urban and peri-urban areas.
ii. Expand and integrate mass transit systems such as sub-urban railway system,
circular rail, metro rail, Regional Rapid Transit System (RRTS), and formal bus
networks, ensuring alignment with demand patterns and user preferences.
iii. Ensure seamless last-mile connectivity by linking major transit systems with
electric feeder buses, mini-buses, and shared mobility services, while formalising
and regulating paratransit modes for safety and accessibility.
iv. Transition State Transport Undertakings (STUs) from operators to regulators
by adopting models such as gross contracting, where private operators run services
under public oversight.
v. Introduce premium bus services in urban areas with differentiated pricing and
service quality, to move car users to public transport.
vi. Enable shared mobility by promoting/facilitating carpooling and ride-sharing
services.
vii. Promote compact, Transit-Oriented Development (TOD) by embedding its
principles in city master plans and revising land-use regulations to support high-
density, mixed-use development near transit hubs.
viii. Institutionalise coordinated governance by empowering/establishing Unified
Metropolitan Transport Authorities (UMTAs) in all major cities and mandating
equity impact assessments for new urban transport projects.
6.2 Future-Ready Freight: Infrastructure, Modal Integration, and
Domestic Manufacturing
The transition to sustainable freight transport in India demands simultaneous investment in
clean energy adoption, enhanced modal efficiency, and domestic technological capability. The Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 80
Towards Net Zero Transport: Key Policy Suggestions
following steps outline a roadmap to decarbonise logistics while strengthening national energy
security and create industrial self-reliance:
i. Promote freight modal shift to rail by setting clear freight rail targets, supported
by dedicated funding including exploring PPPs (double tracking, increased axle loads
& train lengths, scaling Dedicated Freight Corridors (DFCs)), reform freight pricing
system to make it more competitive, and provide assured and timely delivery of
goods, through an independent regulator.
ii. Scale up inland water transport and coastal shipping by using public cargo for
transportation of goods such as fertilizers and coal to seed demand on strategic routes,
especially along major perennial rivers in North-East India, and in coastal regions.
iii. Optimise siting opportunities to multimodal logistics infrastructure such as
logistics parks, integrated freight corridors, and seamless trans-shipment facilities
enabled by end-to-end digital platform to enhance the competitiveness of rail and
water-based freight systems.
iv. Accelerate clean fuel infrastructure by expanding sub-urban railway system,
circular rail, Compressed Bio-Gas (CBG), and flex fuel refuelling stations along
highways, logistics hubs, and industrial corridors, with mandated station density to
ensure accessibility and commercial viability.
v. Enable fleet transition to cleaner fuels through targeted fiscal incentives such as
purchase subsidies, toll and tax exemptions.
vi. Advance hydrogen mobility pilots by scaling demonstration projects for hydrogen
trains, hydrogen fuel based trucks and buses in high-payload sectors, using pilot
results to guide broader deployment strategies.
vii. Strengthen domestic manufacturing ecosystems for clean freight technologies by
supporting R&D and local production of components for cleaner vehicles including
battery systems.
6.3 Strengthening Pipeline Infrastructure for Clean Fuel Transition
Pipelines are most energy efficient mode of oil and gas transportation. Transporting petroleum
products via pipelines reduces the load on road and rail transport, thus easing congestion.
Therefore, it is important to develop pipeline networks to ensure primary movement of
petroleum products such as Petrol, Diesel, Aviation Turbine Fuel (ATF), and Liquefied
Petroleum Gas (LPG) to distribution location/LPG installations be only through pipelines.
In addition, beyond increasing near-term scale-up of Compressed Natural Gas (CNG) and Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 81
Towards Net Zero Transport: Key Policy Suggestions
Liquefied Natural Gas (LNG) as transitional fuels, these pipelines must be envisioned as
future-ready assets that are capable of facilitating the distribution of emerging low-emission
fuels such as CBG, green hydrogen, hydrogen blend natural gas, synthetic methane, ethanol
blends, Sustainable Aviation Fue (SAF), etc. The following steps are recommended to achieve
the above scenario:
i. Accelerate the build out of the national gas pipeline grid by prioritising
connectivity across industrial clusters, high-density freight corridors, urban transport
zones, and into the hinterland to support increased adoption of cleaner fuels like
CNG, LNG, and CBG.
ii. Promote the use of existing and new pipelines for CBG integration by enabling
rural and agro-waste-based gas producers to access urban transport and industrial
demand centres through the City Gas Distribution(CGD) network.
iii. Support pilot integration of hydrogen blends in natural gas pipelines, especially
in industrial hubs and areas with high renewable energy potential, to build technical
readiness and inform broader hydrogen infrastructure planning.
iv. Maximise pipeline utilisation to decongest road and rail networks through
petroleum product pipeline grid by connecting all LPG and major petroleum
distribution installations through pipelines. This strategic shift will free up critical
capacity on rail and road networks, enabling them to better serve expanding passenger
mobility and high-value freight segments.
v. Design all new pipeline infrastructure with future compatibility in mind by
incorporating technical specifications that can accommodate the eventual transport
of green hydrogen, biofuels, and SAF. This includes material compatibility, pressure
ratings, and safety systems aligned with the specific properties of low-carbon fuels.
vi. Promote slurry pipelines for bulk freight to move iron ore and similar materials
through pipelines instead of road/rail by undertaking feasibility studies for connecting
major mines with ports and manufacturing plants. This can reduce both congestion
as well as emissions.
6.4 Accelerating EV Adoption
Electrification of road transport must be aggressively pursued, with an enabling policy
environment for infrastructure and market development. The key interventions that can help
in accelerating electric mobility focus on systemic changes across vehicle electrification,
charging infrastructure, finance, and policy frameworks to accelerate the adoption of electric
vehicles in the country. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 82
Towards Net Zero Transport: Key Policy Suggestions
6.4.1 Strengthen the EV Charging Network
i. Expand EV charging and battery swapping infrastructure with density targets (1
charger per 30 EVs- like US, Norway, and 1 station per 50-100 km on highways).
Develop shared charging hubs in urban clusters and along highway corridors, anchored
by fleet operators. To address range anxiety for EVs, establish a nationwide network
of Battery Charging cum Swapping Stations (BCSS) along National Highways,
with priority to high-density freight and passenger corridors. The Government may
consider allotment of land on long-term lease at concessional or promotional rates
near highways to encourage the setup of BCSS. Prioritise the rollout of battery
swapping networks for taxis, delivery fleets, and other high-utilisation vehicles,
and set national and sub-national targets for charger and swapping station density,
supported by clear standards for interoperability, safety, and accessibility.
ii. Strengthen regulatory and financial enablers by mandating EV-ready infrastructure
in all new public buildings and 10-20% of private buildings, retrofitting existing public
spaces, and providing capital and operational subsidies for charging infrastructure
until it reaches commercial viability.
iii. Enable intelligent and consumer-centric charging systems through smart metering,
time-of-day pricing, and rollout of vehicle-to-grid (V2G) integration standards.
Institutionalise the right to demand an EV charger under consumer protection laws
and operationalise digital visibility through a Unified Energy Interface (UEI) to
support transparent and efficient energy use.
6.4.2 Accelerate EV Deployment and Availability of Clean Power
i. Promote fleet electrification at scale through aggregated procurement of e-buses
and e-taxis, supported by risk-sharing guarantees and RESCO (Renewable Energy
Service Company) models to reduce upfront capital costs. Prioritise electrification
along the top 20 freight corridors by deploying charging and battery swapping
infrastructure, offering time-bound toll waivers, and enabling demand aggregation.
ii. Streamline clean energy access for EV charging by unlocking virtual and group net
metering pathways across all consumer classes, and simplifying adoption processes
in states with existing regulations.
iii. Introduce green tariff options for EV users lacking access to on-site or direct
renewable energy procurement.
iv. Set domestic manufacturing targets for EVs and components as a share of total
production, with a focus on high-volume segments such as two- and three-wheelers,
buses, and trucks. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 83
Towards Net Zero Transport: Key Policy Suggestions
6.4.3 Develop a Circular Economy for EV Batteries
i. Strengthen battery end-of-life management by ramping up collection, establishing
deposit-refund or alternative recovery schemes, and adopting national guidelines for
safe handling, transport and storage of retired lithium-ion batteries.
ii. Promote battery circularity and reuse through standards for refurbished and
second-life applications, circularity-friendly battery design, and safety certifications
to support safe dismantling, reuse, and resale of EV batteries.
iii. Invest in battery innovation and traceability by providing dedicated R&D funding
for environmentally sustainable recycling technologies and developing a “Battery
Aadhaar” system for traceability, data management and lifecycle monitoring.
6.5 Enhancing Energy Efficiency in India’s Transport Sector
Improving energy efficiency in transport is essential to achieving a low-emission, high-
performance mobility system. By embedding efficiency into the core of transport planning and
operations, India can significantly reduce its energy footprint from mobility while supporting
sustainable economic growth.
i. Strengthen regulatory ambition by advancing Corporate Average Fuel Efficiency
(CAFE) norms, ensuring India remains competitive in adopting advanced automotive
technologies covering all categories of vehicles and enhancing fuel efficiency. Further,
Bharat Stage (BS) emission standards need to be aligned with global benchmarks
like Euro 7.
ii. Accelerate electrification of high-utilisation transport modes by prioritising
electrification of commercial vehicles–buses, taxis, and urban freight vehicles. This
ensures that maximum “passenger-kilometres” and “tonne-kilometres” are converted
to low-emission modes.
iii. Modernise vehicle design and fleet composition by mandating aerodynamic
and lightweight designs for trucks and buses to improve fuel efficiency. Introduce
incentives for fleet renewal and enforce stringent maintenance standards to phase
out inefficient, polluting vehicles.
iv. Introduce pricing, taxation, and incentives as the evolving nature of technologies
makes it prudent to ensure a level playing field by not having a tax structure that
tilts the scales in favour of one technology or fuel or the other, and let the market
determine consumer preference. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 84
Towards Net Zero Transport: Key Policy Suggestions
6.6 Driving the Biofuel Economy: Innovation, Security, and
Sustainability
As India scales up its efforts to decarbonise the transport sector, biofuels offer a strategic
pathway to reduce emissions, enhance energy security, and create rural economic value. The
following suggestions outline a roadmap to accelerate adoption of biofuels, while fostering
domestic innovation and minimising ecological trade-offs:
i. Promote and incentivise flex-fuel vehicles by enforcing regulations that require new
vehicles to support multiple ethanol-petrol blends and bio-diesel blends. Offering
tax benefits or fuel price rebates will also encourage consumer adoption.
ii. Accelerate development of second- and third-generation biofuels using non-food
feedstocks such as agricultural waste, algae, and municipal solid waste to address
food security and land-use concerns.
iii. Boost domestic Sustainable Aviation Fuel (SAF) production through capital
subsidies, viability gap funding (VGF), and green tax incentives, with a focus on
second-generation feedstocks such as used cooking oil and agricultural residues.
iv. Scale Compressed Bio-Gas (CBG) production via dedicated funding through
blended finance mechanisms, feed-in tariffs, streamlined grid injection, binding
state targets, blended finance, guaranteed offtake pricing, and reliable feedstock
aggregation networks for consistent plant operations.
v. Position India as a Global Biofuel hub by leveraging its feedstock availability,
refining capacity, and domestic market scale to lead in biofuel innovation and exports.
6.7 Strengthening Vehicle Retirement and Recycling
Phasing out older commercial vehicles can significantly reduce harmful emissions and improve
air quality in India. A study found that a 15-year-old diesel car emits 7.6 times higher PM
and 3.4 times higher NOx than a BS-IV car. It is estimated that scrapping trucks and buses
older than 15 years can lead to a 17% reduction in CO
2 emissions, 18% in Hydrocarbon
(HC) and NOx emissions, and 24% in PM emissions. Given the sheer volume of aging,
high-emission vehicles in India, accelerating their scrapping will be crucial to the country’s
decarbonisation strategy. A scrappage programme would not only improve urban air quality
but also directly contribute to lowering the transport sector’s emissions footprint. Following
are the key initiatives to promote scrapping of older vehicles in India: Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 85
Towards Net Zero Transport: Key Policy Suggestions
i. Mandate state-level scrappage policies to strengthen ELV recycling ecosystems
with a focus on phasing out older, high-emission Internal Combustion Engine
(ICE) vehicles to reduce pollution and improve fleet efficiency. All states and union
territories should formulate and notify their own vehicle scrappage policies aligned
with the national framework.
ii. Establish scrappage facilities through PPPs by offering concessional land from state
governments and enabling private sector participation in infrastructure development.
iii. Provide targeted financial incentives such as scrappage subsidies, road tax
waivers, reduced registration charges, and lower parking fees to encourage voluntary
scrapping and adoption of low emission vehicles.
iv. Simplify and rationalise registration and Regional Transport Office (RTO) fee
structures on a periodic basis to ease the financial burden of transitioning to low
emission vehicle.
v. Launch public awareness campaigns to inform citizens about the environmental
benefits and available incentives under the scrappage policy, fostering greater
participation.
6.8 Promoting Non-Motorised and Active Transport
Improving non-motorised transport (NMT) infrastructure is essential for achieving India’s Net
Zero goals, especially considering that 36% of Indians walked or cycled to work according
to Census 2011. Walking and cycling are zero-emission modes of transport and present a
major opportunity to lock in low-carbon travel behaviour if cities invest in safe, accessible
and well-connected pedestrian and cycling networks. Following are some key steps to create
a safe NMT infrastructure and promote higher NMT use:
i. Scale-up well-designed pedestrian pathways and cycling networks across cities
and towns to support a safe and inclusive infrastructure for everyday mobility.
ii. Conduct targeted awareness campaigns and use behavioural nudges to promote
walking and cycling for short trips, and public or shared transport for longer journeys.
iii. Embed NMT in urban mobility planning to ensure it is integrated into broader
transport strategies and accessible to all socio-economic groups.
iv. Design for climate resilience by ensuring that NMT infrastructure is built to
withstand extreme weather events and climate-related disruptions, particularly in
vulnerable regions. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 86
Towards Net Zero Transport: Key Policy Suggestions
6.9 Enabling Systemic Transformation: Unified Governance, Digital
Infrastructure, and Policy Innovation
Achieving inclusive, scalable, and sustainable mobility requires a forward-thinking, open
approach to technology and data sharing. An Open Data Policy will ensure efficient and
integrated transportation system. There is a critical need to design systems that can support
innovation, growth, and evolving mobility needs from the outset. A Digital Public Infrastructure
(DPI) for mobility offers immense potential in this field and should be prioritised. DPI in
mobility can help to enable the following measures:
i. Establish an executive body (i.e., Low‑Carbon Development Cell / Secretariat)
under the Prime Minister’s Climate Change Council (PMCCC) to coordinate
among the various line ministries/ departments, provide continuous analytical
support, coordinate cross‑cutting bottlenecks, and issue implementation guidance
that aligns missions and schemes across all energy sectors.
ii. Leverage instruments such as the India Carbon Market (ICM) to accelerate
decarbonisation by enabling credit generation from low-carbon transport initiatives
like fleet electrification, modal shifts, and clean fuel transitions.
iii. Build open and interoperable digital infrastructure by scaling up shared platforms,
registries, and protocols such as the Unified Energy Interface (UEI) to enable
seamless integration and innovation across mobility services, drawing inspiration
from successful models such as the Unified Payments Interface (UPI).
iv. Mandate a periodic review cycle for transport-related laws, including the Motor
Vehicles Act and National Urban Transport Policy to promote shift to cleaner fuels.
v. Transition from fragmented systems to unified data ecosystems by expanding
initiatives like the India Urban Data Exchange (IUDX), fostering collaboration
between public and private actors, and reducing duplication in service delivery.
vi. Phased approach towards Zero-Emission Vehicles: The transition strategy should
begin with the phased elimination of polluting diesel vehicles and the adoption
of lower-emission technologies such as CNG, hybrids, and electric vehicles. The
subsequent phase should advance the use of biofuels through flex-fuel vehicles
(FFVs), high Compressed Bio-Gas (CBG) blends, and hybrid FFV models, alongside
continued growth in EV adoption. The final phase should ensure full deployment of
zero-emission vehicles (ZEVs) such as EVs, FFVs, hydrogen based vehicles, and
CBG-based models. To drive this transition, set segment-specific targets with clear
timelines and compliance mechanisms across all vehicle segments. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 87
Towards Net Zero Transport: Key Policy Suggestions
vii. Reforming costs and taxation by reducing GST on replacement batteries, and
providing incentives for lighter, energy-dense technologies till total cost of ownership
(TCO) parity is achieved.
viii. Discourage personal vehicle ownership by implementing congestion pricing, high
parking fees, and ownership taxes in urban centres.
ix. Align the transport strategy with India’s Long-Term Low Emission Development
Strategy (LT-LEDS) by incorporating traffic management as a mitigation lever,
including congestion management, Intelligent Transportation Systems (ITS), demand-
side management, and integrated urban transport planning.
x. Embed road safety as a national priority within unified governance structures.
Coordinated action across vehicle manufacturers, road design standards, and
enforcement agencies should be institutionalised to reduce traffic fatalities. This
goal should be integrated explicitly into national mobility policy through enforceable
targets, transparent monitoring, and responsive intervention mechanisms.
xi. Institutionalise long-term innovation by funding dedicated transport research
centres and supporting startups and communities in co-creating scalable mobility
solutions.
xii. Promote Mobility as a Service (MaaS) platforms through tax incentives and digital
infrastructure support.
xiii. Build professional capacity by expanding programmes in transport planning, policy
and economics. 7
CONCLUSION:
CHARTING A
COHESIVE PATH
TOWARDS NET ZERO
MOBILITY 90Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport
7
Conclusion: Charting a
Cohesive Path Towards Net
Zero Mobility
India’s transport sector has a pivotal role to play in acheiving two defining national priorities:
Viksit Bharat by 2047 and Net Zero Emissions by 2070.
The modelling results in this report make clear that a business-as-usual path in the transport
sector will lead to rising costs, congestion, and emissions. In contrast, a Net Zero pathway
offers cleaner air, lower oil imports, improved competitiveness, and safer, more inclusive
mobility.
7.1 A Systemic Shift Rather than Incremental Change: Technology as a Driver
Transport sector in 2020 contributed around 10% of India’s GHG emissions which could
double by mid-century without intervention. The Net Zero Scenario shows that only deep
structural change can reverse this. Electrification of road and rail, alongside innovation in
batteries, hydrogen, and Sustainable Aviation Fuel (SAF), is central. Innovation must be both
high-tech and high-context - attuned to India’s economic diversity, regional infrastructure,
and energy resource availability.
7.2 Strategic Policy & Governance Levers
India already has strong policies such as FAME (Faster Adoption and Manufacturing of
(Hybrid &) Electric Vehicles), CAFE (Corporate Average Fuel Efficiency) norms, National
Logistics Policy and PM Gati Shakti. But to achieve Net Zero, they must be expanded and
harmonised with climate objectives. Investments in electrification infrastructure, rail and
waterways capacity, and urban mobility reforms (e.g., Transit-Oriented Development, Non-
Motorised Transport infrastructure) are not just desirable, they are indispensable. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 91
Conclusion: Charting a Cohesive Path Towards Net Zero Mobility
7.3 Modelling Insights
The modelling also confirms technical feasibility of India’s decarbonisation - if backed by
enabling policies, robust institutions, and adequate financing. Under the Net Zero Scenario
(NZS):
i. Rail’s share in passenger transport increases to 25% and freight goes to 30% by
2070.
ii. Private car ownership is reduced by 20% relative to Current Policy Scenario (CPS)
due to enhanced public and shared mobility.
iii. Electrification remains the dominant strategy for decarbonising passenger and freight
road transport, while partial electrification i.e. hybridisation acts as an impetus to
full electrification in the initial phases.
iv. Clean fuels like ethanol, green-hydrogen, Compressed Bio-Gas (CBG), Sustainable
Aviation Fuel (SAF), ammonia and e-methanol, emerge to complement electrification,
supporting rural, industrial and long-distance mobility needs.
7.4 An Inclusive and Pragmatic Transition
India’s transition must balance climate ambition with socio-economic realities. The shift to
green mobility must ensure affordable access for all, supporting workers and industries in
transition, and avoiding premature stranding of fossil-based infrastructure. Hybrid solutions,
retrofitting legacy fleets, and skill development for a green workforce will be essential to
manage the transition without economic dislocation.
7.5 Enabling the Future: Institutions, Investments & Innovation
India’s ability to achieve Net Zero emissions in transport by 2070 hinges on a coherent policy
ecosystem:
i. Infrastructure investments (Bharatmala, Dedicated Freight Corridors (DFCs),
Sagarmala, Semi-high and High Speed Rail)
ii. Technology-specific programs (Production Linked Incentive for batteries, National
Hydrogen Mission)
iii. Integrated planning frameworks (PM Gati Shakti, National Rail Plan)
These initiatives not only shape the technical assumptions of the Net Zero Scenario (NZS)
but also ground its feasibility in current institutional progress. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 92
Conclusion: Charting a Cohesive Path Towards Net Zero Mobility
Conclusion
India has the opportunity to lead by example globally by decarbonising one of the most
challenging sectors by making mobility cleaner, safer, and more accessible. Achieving this
will require sustained political will, public-private collaboration, innovative financing, and a
whole-of-government and whole-of-society approach.
By advancing these elements together, India will not only meet its climate commitments
but will also set a global benchmark for clean, inclusive and future-ready mobility systems.
The Net Zero pathway in transport is not just an environmental necessity, but a national
development opportunity. ANNEXURES 94Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport
Annexure A:
Assumptions for
Calculation of BPKMS/
BTKMS
*
1. Macroeconomic Assumptions: Population projections and urbanisation rate based
on MoHFW (till 2036) and UN population projections after 2036 (Latest update
published in 2024)
Table A.1: Population and Urbanisation Assumptions
Category2020 2025 2050 2070
Population (Million) 1347 1411 1596 1621
Urbanisation (%)34.9% 37% 51%
64.7%
2. Table below summarises the key operational parameters assumed for different on-
road vehicle segments, including typical occupancy for passenger modes, payload for
freight vehicles, annual vehicle kilometres (VKM) travelled, and utilisation factors.
These stylised values reflect typical Indian operating conditions drawn from national
communications, transport studies, and freight assessments, and are used to convert
vehicle activity into pkm and tkm for energy and emissions modelling.
Table A.2: Input Parameters for Passenger and Freight Vehicle Segments
Input
Parameters
2W
3W
4W-Cars
4W-Taxis
Buses
Omnibuses
LCV<=3.5
Ton
MCV> 3.5
Ton and <=
12 Ton
HCV > 12
Ton
Occupancy 1.2 3.3 2.6 2.8 38 10 - - -
Payload - - - - - - 1.5 5.7 19.5
VKM 7500259151150070000750003650025,00030,00075,000
Utilisation 70% 70% 75% 90% 75% 25% 60% 70%70%
*
Billion passenger-kilometres (BPKMs), Billion tonne-kilometres (BTKMs) Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 95
Annexure A: Assumptions for Calculation of BPKMS/ BTKMS*
3. Table below presents the assumed mileage values for major on-road vehicle segments
in India (2Ws, 3Ws, 4Ws, buses, omnibuses, and freight vehicles from LCV to
HCV) across conventional and alternative powertrains. These values are drawn from
available literature and based on expert consultations, and are intended for use in
scenario modelling and comparative analysis of energy demand and emissions across
modes.
Table A.3: Vehicle Mileage by Segment and Powertrain for India
Mileage 2W 3W 4W BusesOmnibusesLCV MCV HCV
Petrol (km/L) 52 25 15 - - 14 3 -
Diesel (km/L) - 27 16 4.5 7 15 5 4
CNG/LNG (km/kg) - 25 23 7.5 10 19 6.7 3.3
Electric (km/kWh) 33 18 6.25 1 1 5.8 3.5 0.9
Hydrogen (km/kWh) - - 2.220.36 - 3.6 2 0.55
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transport-indian-cities Scenarios towards Viksit Bharat and Net Zero - Sectoral Insights: Transport (Vol. 3)
VOL. 3
SECTORAL INSIGHTS:
TRANSPORT
SCENARIOS TOWARDS VIKSIT BHARAT AND NET ZERO
SECTORAL INSIGHTS:
TRANSPORT
SCENARIOS TOWARDS VIKSIT BHARAT AND NET ZERO Copyright© NITI Aayog, 2026
NITI Aayog
Government of India,
Sansad Marg, New Delhi–110001, India
Suggested Citation
NITI Aayog.(2026). Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights:
Transport (Vol. 3)
Available at: https://niti.gov.in/publications/division-reports
Disclaimer
1. This document is not a statement of policy by the National Institution for Transforming India
(hereinafter referred to as NITI Aayog). It has been prepared by the Green Transition, Energy &
Climate Change Division, NITI Aayog under various Inter-Ministerial Working Groups (IMWGs)
constituted to develop Net Zero pathways for India.
2. Unless otherwise stated, NITI Aayog, in this regard, has not made any representation or warranty,
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3. The assertions, interpretations, and conclusions expressed in this report are those of the author(s)
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the data and conduct their analysis before forming conclusions or taking any policy, academic, or
commercial decisions. SCENARIOS TOWARDS
VIKSIT BHARAT AND NET ZERO
SECTORAL
INSIGHTS: TRANSPORT
(VOL. 3) Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport viiScenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport
Authors and
Acknowledgement
Chairperson
Dr. Anil Jain
Chairperson, Petroleum and Natural Gas
Regulatory Board (PNGRB)
Leadership
Sh. Suman Bery
Vice Chairman, NITI Aayog
Sh. B.V.R. Subrahmanyam
CEO, NITI Aayog
Dr. Anshu Bharadwaj
Programme Director, Green Transition,
Energy & Climate Change Division,
NITI Aayog
Sh. Rajnath Ram
Adviser, Energy, NITI Aayog
Sh. S.C. Gupta
Director, PNGRB
Core Modelling Team
Sh. Venugopal Mothkoor
Energy and Climate Modelling Specialist,
NITI Aayog
Dr. Anjali Jain
Consultant G-II, NITI Aayog
Sh. Nitin Bajpai
Consultant, NITI Aayog
Authors
NITI Aayog
Sh. Venugopal Mothkoor
Energy and Climate Modelling Specialist,
NITI Aayog
Dr. Anjali Jain
Consultant G-II, NITI Aayog
Sh. Nitin Bajpai
Consultant, NITI Aayog
Sh. Saksham Agarwal
Young Professional, NITI Aayog
Ms. Anupama Kumari
Consultant, NITI Aayog
Knowledge Partners
Sh. Madhav Pai
CEO, WRI India
Ms. Akshima Ghate
Managing Director, RMI India
Sh. Sharif Qamar
Associate director, TERI
Ms. Shreya Gupta
Research Associate, TERI
Sh. Amit Bhatt
International Council on Clean
Transportation (ICCT) Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport viii
Authors and Acknowledgement
Ms. Krithika P. R
Program Lead, ICCT
Ms. Ilika Mohan
Research Manager, ACPET
Peer Reviewers
Sh. KC Sharma
Ministry of Road, Transport and Highways
(MoRTH)
Sh. Sharath Kumar Pallerla
Scientist G, Ministry of Environment,
Forest & Climate Change (MoEFCC)
Sh. Pulkit Singhal
Director (Traffic), Ministry of Railways
Sh. Ved Bhushan
Director (Planning/ME), Ministry of
Railways
Ms. Neha Patel Bhattacharjee
Consultant (Engineering), PNGRB
Ms. Afshan Ameer
Young Professional, NITI Aayog
Working Group Coordinators
Sh. Kamil Bhullar
Deputy Director, NITI Aayog
Sh. Venugopal Mothkoor
Energy and Climate Modelling Specialist,
NITI Aayog
Working Group Members
Sh. Rajnath Ram
Member Secretary of the Group- Adviser,
Energy, NITI Aayog
Sh. Abhay Bakre
Former DG, BEE; Mission Director,
National Green Hydrogen Mission
Sh. R Lakshmanan
Joint Secretary, M/o PSW
Sh. Sudhendu Jyoti Sinha
Adviser (Infra Connectivity), NITI Aayog
Sh. Sharath Kumar Pallerla
Scientist G, Ministry of Environment,
Forest & Climate Change (MoEFCC)
Dr. Preeti Banzal
Scientist G, Office of PSA
Sh. KC Sharma
Advisor, MoRTH
Sh. Rajnesh Singh
Director, MHI
Sh. Pulkit Singhal
Director (Traffic), Ministry of Railways
Sh. Ved Bhushan
Director (Planning/ME), Ministry of
Railways
Sh. BPS Bhadoria
Director, MoHUA
Sh. Sameer Pandita
Director, BEE
Sh. Rajesh Asati
Deputy Secretary, MoPSW
Sh. Gaurav Katiyar
Joint Director, MoMSME
Sh. Dharmendra Kumar
Joint Director, M/o Finance
Ms. Ekta Agrawal,
Deputy Director, DGCA
Sh. Anubhav Uppal
Scientist D, MNRE Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport ix
Authors and Acknowledgement
Sh. Pradyut Pyne
Assistant Director, DEA
Sh. PK Banerjee
Executive Director, SIAM
Ms Akshima Ghate
Managing Director, RMI India
Sh. Amit Bhatt
Managing Director (India), ICCT
Sh. Sharif Qamar
Associate Director, TERI
Ms. Priti Shukla
Programme Manager, Shakti Sustainable
Energy Foundation
Collaborators/Expert Consultants
Sh. Neelesh Sah
Joint Secretary, Ministry of Environment,
Forest & Climate Change (MoEFCC)
Sh. Shard Sapra
Scientist F, Ministry of Environment, Forest
& Climate Change (MoEFCC)
Sh. Ajay Raghava
Scientist E, Ministry of Environment, Forest
& Climate Change (MoEFCC)
Sh. Paresh Kumar Goel
Former Director, MoRTH
Sh. Vipin Kumar
Assistant Director, MoMSME
Sh. Rahul Chakraborty
Former Associate Fellow, TERI
Ms. Namita Singh,
Researcher, ICCT
Sh. Abhishek
Associate Researcher, ICCT
Ms. Kartike Karwal
Deputy Director, SIAM
Ms. Trupti Deshpande,
Senior Program Manager, Shakti
Foundation
Sh. Jaideep Saraswat,
Associate Director, Vasudha foundation
Dr. Probal Ghosh,
Associate Director, IRADe
Sh. Rahul Bharti
Sr Executive Director, Maruti Suzuki
Sh. Ashish Chutani
Head Government and Policy Affairs,
Maruti Suzuki
Sh. Nishant Sarna
Sr General Manager, Maruti Suzuki
Sh. Prasad Phadke
Sr Gen Manager, SIAM (Tata Motors)
Ms. Madhura Sekhsaria,
Senior General Manager (PV Strategy),
Tata Motors
Sh. Aakaash Singh,
Dy General Manager (Government &
Public Affair), Tata Motors
Ms. Pamela Tikku,
VP & Head, Public Affairs, Mahindra &
Mahindra
Sh. Alok Verma,
Head of Corporate Strategy & Planning,
Ashok Leyland
Sh. Alok Sharma
Director (R&D), IOCL
Sh. S Lakshminarayanan
ED (SD), IOCL Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport x
Authors and Acknowledgement
Sh. Y.B Ramakrishna
Chairperson, IFGE CBG Producer Forum
Sh. S. Kannan
CGM (Marketing), BPCL
Sh. Baljeet Singh
Director, CHT
Sh. Bibhudatta Rout
GM (AE), IOCL
Sh. K. Vasantha Rao
GM (SD), IOCL
Sh. Vaibhav Pratap Singh
Executive Director, CSI
Sh. Dev Jyoti
Head Infratech, CII
Sh. Komal Sharma
Joint Director (Infrastructure), FICCI
Sh. Varun Gogia
Deputy Director (Logistics), FICCI
Sh. Pramod Sharma,
President Corporate Affairs, Sun Mobility
Sh. Tushar Patil
AVP, Praj Industries Ltd
Sh. Aishwarya Raman
Executive Director, OMI Foundation
Sh. Sanjay Ganjoo
DG, IFGE
Sh. D L N Sastri
Director (Oil, Refining & Marketing), FIPI
Sh. Sharan Singh
Dy. General Manager–Group Public
Affairs, Mahindra & Mahindra Ltd.
Ms. Anupama Kumari
Consultant, NITI Aayog
Sh. Suresh Subramanian
AD, FICCI
Technical Editors
Ms. Aastha Manocha
Editor and Communication Consultant
(Independent)
Ms. Rishu Nigam
Lead Editor and Communication
Consultant (Independent)
Communication and Research &
Networking Division, NITI Aayog
Ms. Anna Roy
Programme Director, Research &
Networking
Sh. Yugal Kishore Joshi
Lead, Communication
Ms. Keerti Tiwari
Director, Communication
Dr. Banusri Velpandian
Senior Specialist, Research and Networking
Ms. Sonia Sachdeva Sharma
Consultant, Communication
Sh. Sanchit Jindal
Assistant Section Officer, Research and
Networking
Sh. Souvik Chongder
Young Professional, Communication
NITI Design Team
NITI Maps & Charts Team Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport xi
Contents
Contents
List of Figuresxiii
List of Tablesxiv
List of Abbreviations xv
Executive Summary xix
1. Introduction and Context..........................................................................................................................1
1.1 A Decade of Growth (2014–2024) 3
1.2 Modal Composition of Mobility 4
1.3 The Dual Imperative: Economic Growth and Environmental Stewardship 5
1.4 Addressing Disparities 6
1.5 Institutional Mechanism: Inter-Ministerial Working Group on Transport 7
2. Transport Sector: Scale, Structure & Growth Drivers......................................................................... 9
2.1 Energy, Emissions and Infrastructure Investment 10
2.1.1 Infrastructure Investment 10
2.2 Transport Demand 13
2.2.1 Modes of Transportation 14
2.3 Alternative Clean Fuels, Technologies and their Trends in Transportation 19
2.3.1 Electric Vehicles 19
2.3.2 Biofuels in Transportation 21
2.3.3 Green Hydrogen and Its Derivatives 23
2.3.4 Natural Gas 24
3. Current Policy Landscape in the Transport Sector.............................................................................27
3.1 Global Trends in Transport Decarbonisation Policy 28
3.2 India’s Transport Sector Policy Interventions 29
3.2.1 Emission & Efficiency Standards 30
3.2.2 Fuel and Technology Transition Policies 31
3.2.3 Infrastructure & Modal Shift Initiatives 34
3.3 Behavioural Nudges for Sustainable Mobility 36
4. Pathways to 2070: Modelling Transport Demand & Energy Use.....................................................39
4.1 Modelling Approaches and Methodology 40
4.1.1 Methodology for Final Energy Demand Estimation of Transport Sector 42 Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport xii
Contents
4.1.2 Passenger and Freight Transport Modelling Approaches 43
4.1.3 Scenarios Compared 44
4.2 Activity Projections and Baseline Estimation 49
4.2.1 Activity demand (BPKM/BTKM) Methodology Projections 49
4.2.2 Estimation of Baseline Transport Demand 50
4.3 Results and Discussion 51
4.3.1 Passenger Transport: Demand and Modal Shift 51
4.3.2 Freight Transport: Demand and Modal Shift 56
4.3.3 Technology Transitions: Electrification, Gas, and Alternative Fuels 60
4.3.4 Transport Energy Demand 63
5. Challenges in the Transport Sector Transition.....................................................................................71
5.1 Accelerating the Clean Mobility Transition 72
5.2 Underutilised Infrastructure and Modal Gaps 73
5.3 Fuel Diversification 74
5.4 Strengthening Regulatory Architecture and Circularity 75
5.5 Public Transport and Modal Integration 75
6. Towards Net Zero Transport: Key Policy Suggestions.......................................................................77
6.1 Reimagining Urban Transport: Sustainability, Integration, and Equity 79
6.2 Future-Ready Freight: Infrastructure, Modal Integration, and Domestic Manufacturing 79
6.3 Strengthening Pipeline Infrastructure for Clean Fuel Transition 80
6.4 Accelerating EV Adoption 81
6.4.1 Strengthen the EV Charging Network 82
6.4.2 Accelerate EV Deployment and Availability of Clean Power 82
6.4.3 Develop a Circular Economy for EV Batteries 83
6.5 Enhancing Energy Efficiency in India’s Transport Sector 83
6.6 Driving the Biofuel Economy: Innovation, Security, and Sustainability 84
6.7 Strengthening Vehicle Retirement and Recycling 84
6.8 Promoting Non-Motorised and Active Transport 85
6.9 Enabling Systemic Transformation: Unified Governance, Digital Infrastructure,
and Policy Innovation 86
7. Conclusion: Charting a Cohesive Path Towards Net Zero Mobility ...............................................89
7.1 A Systemic Shift Rather than Incremental Change: Technology as a Driver 90
7.2 Strategic Policy & Governance Levers 90
7.3 Modelling Insights 91
7.4 An Inclusive and Pragmatic Transition 91
7.5 Enabling the Future: Institutions, Investments & Innovation 91
Annexures...........................................................................................................................................................93
References. ..........................................................................................................................................................97 xiiiScenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport
List of Figures
Figure 1.1Global comparison of GDP/capita vs PKM/capita3
Figure 2.1Growth in investments in public sector from 2004 to 2024 for roads,
railways, waterways and aviation
11
Figure 2.2Modal share of passenger and freight transport for different countries14
Figure 2.3Increasing vehicle ownership since 199015
Figure 2.4Vehicles per 1000 population vis-a-vis GDP/capita for India 15
Figure 2.5Representation of vehicles per 1000 population for developed countries16
Figure 2.6Trend of domestic air passenger traffic18
Figure 2.7Trend of cargo carried by the domestic aviation sector 18
Figure 2.8EV sales penetration (% of new registrations) in India across 2W,
3W and 4W
20
Figure 2.9CNG vehicle sales penetration among LGVs, MGVs, and HGVs 24
Figure 4.1Methodology representation for transport energy and emission estimation
(a) passenger and (b) freight
44
Figure 4.2Historical growth in per capita passenger transport demand (road + rail)
in various countries showing growth followed by saturation
50
Figure 4.3Baseline passenger transport (BPKM) and freight transport (BTKM)
demand estimation (2025)
51
Figure 4.4Projected growth in billion passenger-kilometres (BPKMS) and per-
capita passenger kilometres (PKMS)
52
Figure 4.5Global comparison of GDP/capita vs PKM/capita highlighting that
mobility increases with rising income levels
52
Figure 4.6Modal shift projections of passenger transport under CPS and NZS till
2070
54
Figure 4.7Projected growth in freight demand under CPS and NZS till 2070 56
Figure 4.8Global comparison of freight demand per capita as a function of Income
(GDP per capita)
57
Figure 4.9Modal shift projections of freight transport till 2070 under CPS and NZS
highlighting increase in rail share
59
Figure 4.10Transport energy demand under CPS and NZS until 2070 in Mtoe 64
Figure 4.11Drivers for lower energy use in NZS by 2070 compared to CPS 64
Figure 4.12Biofuel demand under CPS and NZS by 2050 and 207068
CPS: Current Policy Scenario | NZS: Net Zero Scenario xivScenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport
List of Tables
Table E1 Current Policy Scenario (CPS) vs Net Zero Scenario (NZS) – 2050 &
2070
xix
Table 3.1Key policies and standards on vehicle emissions and fuel efficiency30
Table 3.2Key policies and programs enabling fuel transition in transport sector31
Table 3.3Key policies and programs to promote electrification in transport
sector
33
Table 3.4Key policies and initiatives for transport infrastructure planning35
Table 3.5Behavioural nudges and interventions for promoting sustainable
mobility choices
37
Table 4.1Summary of key indicators in CPS and NZS till 2050 and 2070 44
Table 4.2Modal share–road transport projections under CPS & NZS, 2070 55
Table 4.3Vehicle ownership projections56
Table 4.4Freight vehicle ownership projections 2070 (per 1000 population)60
Table 4.5xEV Penetration projections on annual sales for passenger & freight
vehicles till 2070 for CPS and NZS
61
Table 4.6Projections of fuel demand under CPS and NZS by 2050 & 2070 66
Table 6.1At a glance: Pathways for an efficient transport transition 78
CPS: Current Policy Scenario | NZS: Net Zero Scenario xvScenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport
List of Abbreviations
AAM Activity Analysis Module
ACC Advanced Chemistry Cell
AMRUT Atal Mission for Rejuvination and Urban Transformation
ASIF Activity, Structure, Intensity, and Fuel
ATF Aviation Turbine Fuel
ATJ Alcohol-to-Jet
BaaS Battery-as-a-Service
BEE Bureau of Energy Efficiency
BPKMs Billion Passenger-Kilometres
BRT Bus Rapid Transit
BSBharat Stage
BTKMs Billion Tonne-Kilometres
CAFE Corporate Average Fuel Efficiency
CBG Compressed Bio-Gas
CBO CBG Blending Obligation
CGE Computational General Equilibrium
CNG Compressed Natural Gas
CORSIA Carbon Offsetting and Reduction Scheme for International Aviation
CPS Current Policy Scenario
CVConventional Vehicle
DFC Dedicated Freight Corridor
DPI Digital Public Infrastructure
DRDO Defence Research and Development Organisation
ELV End-of-Life Vehicle
EPR Extended Producer Responsibility
EVElectric Vehicle
FAME Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles
FAR Floor Area Ratio Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport xvi
List of Abbreviations
FCV Fuel Cell Vehicle
FOFuel Oil
FT / FT-SYN Fischer-Tropsch (Synthesis)
GCAM Global Change Analysis Model
GHG Greenhouse Gas
GQGolden Quadrilateral
HCV Heavy Commercial Vehicle
HDV Heavy-Duty Vehicle
HEFA Hydroprocessed Esters and Fatty Acids
HSD High Speed Diesel
HSR High-Speed Rail
ICAO International Civil Aviation Organization
ICCT International Council on Clean Transportation
ICE Internal Combustion Engine
ICM India Carbon Market
IEM India Emission Model
IESS Indian Energy Security Scenarios
INR Indian Rupee
IRIndian Railways
ITS Intelligent Transport System
IUDX India Urban Data Exchange
IWT Inland Water Transport
LEAP Low Emissions Analysis Platform
LNG Liquefied Natural Gas
LPG Liquefied Petroleum Gas
MIDC Modified Indian Driving Cycle
MMLP Multi-Modal Logistics Park
MMT Megatonne / Million Metric Tonnes
MTPA Million Tonnes Per Annum
MoCA Ministry of Civil Aviation
MoEFCC Ministry of Environment, Forest & Climate Change
MoPNG Ministry of Petroleum & Natural Gas
MoPSW Ministry of Ports, Shipping & Waterways
MoRTH Ministry of Road, Transport and Highways
MRO Maintenance, Repair & Overhaul Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport xvii
List of Abbreviations
MSMotor Spirit (petrol)
MtCO₂e Million tonnes of CO₂ equivalent
Mtoe Million tonnes of oil equivalent
NDC Nationally Determined Contribution
NITI National Institution for Transforming India
NMT Non-Motorised Transport
NUTP National Urban Transport Policy
NZS Net Zero Scenario
OMCs Oil Marketing Companies
PASTA Policy Ambition and Sustainable Transport Assessment
PLI Production-Linked Incentive
PM E-DRIVE PM Electric Drive Revolution in Innovative Vehicle Enhancement
PPP Public-Private Partnership
PtL Power-to-Liquid
PtX Power-to-X
RERenewable Energy
RMI Rocky Mountain Institute
RRTS Regional Rapid Transit System
SAF Sustainable Aviation Fuel
SATAT Sustainable Alternative Towards Affordable Transportation
SEZ Special Economic Zone
SIAM Society of Indian Automobile Manufacturers
STUs State Transport Undertakings
TOD Transit-Oriented Development
TCO Total Cost of Ownership
TIMES The Integrated MARKAL EFOM System
UEI Unified Energy Interface
UPI Unified Payments Interface
VGF Viability Gap Funding
WEF World Economic Forum
WLTP Worldwide Harmonised Light Vehicles Test Procedure
xEV
Electrified vehicles (generic term for all types of electric vehicles i.e.,
Battery EV, Strong Hybrid EV, Range Extender EV, Plug-in Hybrid EV) xixScenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport
Executive Summary
The transport sector is one of the key drivers of India’s economy. It also contributes significantly
to the country’s energy use and emissions, accounting for 20% of final energy demand and
around 10% of greenhouse gas (GHG) emissions in year 2020. As India urbanises rapidly and
travel demand surges, the sector risks being locked into higher fuel imports, poorer air quality,
and rising logistics costs. Decarbonising transport through modal shift, zero-emission vehicles
(ZEVs), and clean fuels & technologies is therefore critical to meet India’s Net Zero 2070 goal.
Modelling Approach
For this study on Net Zero pathways for the transport sector, NITI Aayog’s Inter-Ministerial
Working Group developed two robust modelling pathways to 2070. The modelling applies the
Activity Structure Intensity Fuel (ASIF) framework through the tools including India Energy
Security Scenarios (IESS) and The Integrated MARKAL-EFOM System (TIMES) to estimate
transport demand and technology transition upto 2070. The models integrate data on modal share,
vehicle stock, technology stack and fuel efficiency, while reflecting the impact of ongoing national
programmes such as Dedicated Freight Corridors (DFCs), metro expansion, and rail modernisation.
The analysis of energy demand to 2070 is based on two scenarios: a Current Policy Scenario (CPS)
reflecting business-as-usual, and a Net Zero Scenario (NZS) aligned with India’s 2070 target.
Deep decarbonisation is feasible, front-loaded, and visible in the comparative
outcomes
By 2070, transport energy demand falls to about 200 million tonnes of oil equivalent (Mtoe)
under Net Zero Scenario (NZS), around 40% lower than the 336 Mtoe projected under Current
Policy Scenario (CPS). This decline stems from near-universal adoption of Zero-Emission
Vehicles (ZEVs) in road transport, a structural shift towards public and shared transport,
increased rail and waterways freight, and more compact, efficient urban development.
Fuel mix is decisively rebalanced from oil-heavy to clean fuels
Under Current Policy Scenario (CPS), petroleum accounts for majority of the 2070 transport
energy mix. Under Net Zero Scenario (NZS), its share falls to around 21%, with demand
met majorly through electricity, biofuels, and green hydrogen. Electricity’s share more than
doubles between 2050 and 2070, biofuels expand to about one-fourth, and hydrogen emerges Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport xx
Executive Summary
as a major carrier for long-haul freight, shipping, and aviation. Natural gas plays a key role
under CPS but the share is taken by Bio-CNG by 2070 in NZS.
Mobility structure shifts toward mass, shared, and rail transport
By 2070, public and shared modes account for around 60% of passenger trips under Net Zero
Scenario (NZS), (vs 50% in (CPS). Passenger rail’s share rises to 25% under NZS (from 20% in
CPS), while freight rail expands to 30% (from 25% in CPS). Private car ownership stabilises around
200 vehicles per 1,000 people under NZS, compared to 250 under Current Policy Scenario (CPS).
Macro dividends are large and enduring
Net Zero Scenario (NZS) lowers oil imports and price-shock vulnerability, improves air quality
and health gains, and seeds new clean-transport industries (batteries, chargers, electrolyzers
and recycling), creating jobs and industrial capacity across manufacturing and services.
Indicator snapshot - Current Policy Scenario vs Net Zero Scenario
Table E1: Current Policy Scenario vs Net Zero Scenario – 2050 & 2070
Indicator Current
Current Policy
Scenario
Net Zero
Scenario
2050 2070 2050 2070
Passenger Kilometres per Capita 3950 12200 14000 1100012000
Tonne Kilometres per Capita 2920 8200 10000 6500 8000
Modal Share
Passenger
Road 78% 73% 70% 69% 64%
Metro<1% 2% 2% 2% 3%
Rail 17% 19% 20% 22% 25%
Air4% 7% 8% 7% 8%
Freight
Road66% 67% 65% 63% 60%
Rail 22% 24% 25% 27% 30%
Air<1% <1% <1% <1% <1%
Waterways 8% 7% 7% 8% 8%
Pipelines 3.60% 2% 2% 2% 2%
Road Transport
Public Share (Taxi,
3-Wheelers)
47% 49% 50% 54% 60%
Energy and Fuel Usage
Overall Energy Demand (Mtoe) 137 335 307 250 192
Passenger Transport Energy Demand
(Mtoe)
74 168 152 125 110
Freight Transport Energy Demand (Mtoe)63 167 155 125 82 Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport xxi
Executive Summary
Petroleum use86% 61% 46% 49% 21%
Electricity use2% 14% 24% 19% 45%
Biofuels use (Ethanol, Biodiesel,
Sustainable Aviation Fuel (SAF))
4% 7% 8% 13% 20%
Gas use (Natural gas/ CBG(Compressed
Bio-Gas)/ GH2)
8% 18% 22% 17% 10%
i
GH2 based ammonia & e-methanol for
shipping
- - - 1% 4%
Vehicle Ownership (Cars per 1,000
Population)
32 170 250 130 200
Investment Requirement (2026–2070)*USD 3.44 trillion USD 4.3 trillion
* Refer Report on Financing Needs (Vol. 9)
Conclusion
Net Zero Scenario delivers a systemic transformation with lower total energy use, a
predominantly clean fuel mix, and mobility patterns that ensure equal or better access with
fewer private vehicles.
Key Challenges
While technically feasible, India’s Net Zero transport pathway faces several systemic barriers
that could raise transition costs, prolong petroleum dependence, and delay socio-economic
gains. Public charging infrastructure remains sparse, around 17 chargers per million people,
particularly for buses and trucks. High upfront EV costs and reliance on imported cells, critical
minerals, and electronic components expose mobility to supply-chain risks. Road transport
continues to dominate (78% of passengers, 66% of freight), while rail and waterways are
underutilised due to connectivity and governance gaps. Fragmented institutional policies, and
slow coordination on Zero-Emission Vehicles (ZEVs), Transit-Oriented Development (TOD),
freight corridors, and clean-fuel policies, limits scalability and systemwide impact. Vehicle
and battery recycling systems remain nascent, risking material losses and environmental harm
as electrification scales.
Policy Suggestions / Levers
A. Accelerate ZEVs & Supporting Infrastructure
i. Adoption of Zero-Emission Vehicles (ZEVs) including Battery Electric Vehicles
(BEVs), hydrogen based vehicles, Biofuels (Ethanol based Flex Fuel Vehicles (FFVs)
and Compressed Bio-Gas (CBG) based vehicles) should be kept as key priority
for the long term vision and accordingly fomalise segment-wise ZEV acceleration
i consists only clean fuels Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport xxii
Executive Summary
through 2035 for two-/three-wheelers, passenger cars, buses, and trucks.
ii. Expand public and corridor-based charging and swapping infrastructure with safety
and interoperability standards. Enforce EV-ready building codes, enable smart
charging via metering, time-of-day pricing, and vehicle-to-grid (V2G) integration
through the Unified Energy Interface (UEI).
iii. Prioritise high-utilisation fleets- buses, taxis, and logistics vehicles through aggregated
procurement, Renewable Energy Services Company (RESCO) models, and corridor
electrification. Strengthen domestic manufacturing of batteries, cells, and power
electronics with Production Linked Incentive (PLI) backed supply chains to secure
competitiveness and local value creation.
The transition strategy should begin with the phased elimination of polluting diesel vehicles
and the adoption of lower-emission technologies such as CNG, hybrids, and electric vehicles.
The subsequent phase should advance with the use of biofuels through FFVs, high Bio-CNG
blends, and hybrid FFV models, alongside continued growth in EV adoption. The final phase
should ensure full deployment of Zero-Emission Vehicles (ZEVs) such as EVs, hydrogen
based vehicles, FFVs, and CBG-based models. To drive this transition, set segment-specific
targets with clear timelines and compliance mechanisms across all vehicle segments.
B. Promote Modal Rebalancing and Freight Efficiency
i. Expand metro, Regional Rapid Transit System (RRTS), and bus networks with strong
last-mile connectivity, and formalised paratransit integration.
ii. Encourage Transit-Oriented Development (TOD) and premium bus services.
iii. Shift freight to cleaner modes by achieving rail targets unit clarity-MMT, expanding
inland waterways, coastal shipping and multimodal logistic parks (MMLPs),
supported by Dedicated Freight Corridors (DFCs) and seamless trans-shipment.
iv. Use congestion and parking pricing, alongside safe walking and cycling networks,
to reduce dependence on private vehicles and road freight.
C. Advancing Clean-Fuel Diversity and Decarbonising Aviation and Shipping
i. Scale sustainable biofuels and Sustainable Aviation Fuel (SAF) production with
blending infrastructure for ethanol, biodiesel, and Compressed Bio-Gas (CBG) under
clear sustainability standards.
ii. Develop a national roadmap for green hydrogen and e-fuels, focusing on heavy-duty
transport, shipping, and aviation.
iii. Promote methanol, ammonia, and synthetic fuels for hard-to-electrify segments.
iv. Future-proof gas and petroleum pipeline networks to be hydrogen- and biofuel-
compatible, integrate CBG into city gas distribution and explore slurry pipelines for
bulk materials transportation. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport xxiii
Executive Summary
D. Strengthening Governance, Circularity, and Financing
i. Establish Unified Metropolitan Transport Authorities (UMTAs) in major cities
with Digital Public Infrastructure (DPI) and open-data systems like Unified Energy
Interface (UEI) and IUDX (India Urban Data Exchange) for coordination and
transparency.
ii. Leverage the India Carbon Market (ICM) to finance low-carbon mobility.
iii. Promote vehicle and battery circularity through state-level End-of-Life Vehicles
(ELV) policies, PPP-based scrappage facilities, and traceable recycling systems (e.g.
‘Battery Aadhaar’).
iv. Raise efficiency and performance through Corporate Average Fuel Efficiency
(CAFE) norms, Bharat Stage standards, lightweight design, and strict maintenance
enforcement to ensure technology-neutral competition.
Investment Needs and Co-benefits
Implementing the Net Zero pathway requires about USD 4.3 trillion in cumulative investment
till 2070, around 25% higher than the USD 3.44 trillion under Current Policy pathway. This
additional investment, however, is a strategic opportunity than a cost burden. It yields enduring
benefits through lower fuel imports, improved air quality and health outcomes, greater energy
security, and robust industrial and employment growth in batteries, charging, hydrogen, and
recycling. Early investment in electrification, biofuels, and hydrogen insulates India from
global fuel volatility and positions the country as a global leader in clean transport technology.
Way Forward / Strategic Priorities
The next decade will determine whether India’s transport transition achieves its full potential.
Turning the Net Zero pathway into a delivery plan requires coordinated action across
government, industry, and finance. Clear targets on Zero-Emission Vehicles (ZEVs) and
clean-fuel penetration for 2025–2035, backed by funded central and state plans, can create
investment certainty. Rapid deployment of charging and swapping networks, hydrogen pilots
for buses and freight, and the expansion of DFCs, MMLPs, and waterways will be pivotal.
Further, supportive policies should be adopted to create an enabling ecosystem, including
charging infrastructure and CNG–CBG synchronisation through pipeline infrastructure.
Domestic supply chains for EVs, fuel cells, and hydrogen systems underpinned by Extended
Producer Responsibility (EPR) and recycling frameworks will build resilience and circularity.
Finally, unified governance through UMTAs, DPI, and UEI/IUDX, combined with milestone
reviews in 2030, 2035, and 2047, will ensure accountability and adaptive course correction. 1
INTRODUCTION
AND CONTEXT 2Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport
Introduction and
Context
1
Introduction: A Strategic Imperative
India stands at a critical juncture in its development, marked by rapid urbanization, economic
expansion, and rising aspirations for mobility and logistics services. The transport sector
plays a foundational role in enabling this transformation, serving as a catalyst for regional
integration, industrial competitiveness, and social inclusion. Given India’s vast geography,
spanning 3.28 million square kilometres and a population of over 1.4 billion, mobility is not
merely a logistical requirement but a strategic necessity.
Mobility is both a barometer and a driver of economic development. The relationship between
per capita passenger kilometres (PKMs) and prosperity is evident across global economies:
advanced nations such as Germany, Japan, and the United Kingdom consistently register
per capita PKM levels exceeding 11,000, reflecting the strong correlation between mobility
demand and GDP per capita (Figure 1.1). This pattern illustrates how higher incomes enable
greater travel capacity and vice versa. In contrast, India in 2023 recorded an average annual
travel of 4,273 km per capita annually (up from 3,483 km in 2000). While this figure is modest
in global terms, it represents a significant cumulative national footprint due to the scale of
India’s population, already surpassing many developed countries in aggregate mobility.
Efficient mobility systems expand access to education, employment, and markets. High PKM
levels also correlate with productivity, urban efficiency, and reduced regional disparities.
Mobility, thus, is not just an economic service, it is the circulatory system of national growth.
As of 2022–23, the transport sector accounts for about 4.5% of India’s Gross Value Added.
1 Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 3
Introduction and Context
Australia
France
Germany
Spain
Japan
Italy
United Kingdom
United States
Thailand
Vietnam
India (2023)
0
5,000
10,000
15,000
20,000
25,000
0 10,00020,00030,00040,00050,00060,00070,00080,000
Passenger Kilometres (PKM) per Capita
GDP Per Capita, PPP (constant 2021 Int'l $)
Figure 1.1: Global comparison of GDP/capita vs Passenger Kilometres (PKM) per capita
Source: World Bank, OECD
2
1.1 A Decade of Growth (2014–2024)
India’s transport sector witnessed significant progress in the last 10 years:
Railways: Over 31,000 km of new tracks and 45,000 route km were electrified. The
Dedicated Freight Corridors (DFCs) are 90% operational and have cut transit times
by up to 40%. Passenger services were boosted with 68 Vande Bharat trains and
modernisation of 1,000 Amrit stations. In addition, 77 Gati Shakti cargo terminals
enhanced freight operations.
3
Roadways: The road network expanded to 6.7 million km. National Highways grew
by 60% from 91,287 km in 2014 to 146,145 km in 2023. The pace of highway
construction also increased by 143% to 28.3 km/day.
4
Supported by the Bharatmala
Pariyojana, the road freight market crossed USD 150 billion.
Rural Access: PM Gram Sadak Yojana connected 1,63,000 habitations, improving
last-mile connectivity and boosting non-farm incomes.
5
Ports and Shipping: Under Sagarmala, cargo capacity rose from 581 million metric
tonnes (MMT) to 855 MMT and container traffic went from 7.9 million twenty-foot
equivalent unit (TEUs) to 13.5 million TEUs.
6
Major port revenues doubled to INR
24,203 crore in FY 2024-25.
Aviation: Passenger volumes rose from 10.4 crore to 22 crore.
7
UDAN (Ude Desh
ka Aam Nagrik) operationalised 619 routes and 88 airports.
8
Air cargo reached Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 4
Introduction and Context
8 MMT with 80 airports run on 100% renewable energy. In November 2024, India
recorded a daily peak of five lakh domestic passengers.
9
Pipelines: The operational natural gas pipeline network has expanded from about
15,340 km in 2014 to roughly 25,000 km by 2024, with a further 10,000 km under
construction. Over the same period, crude oil and petroleum product pipelines have
also grown to around 10,500 km and 24,000 km respectively, making pipelines the
dominant mode for long‑distance liquid fuel transport.
10
Further, India undertook
various policy interventions such as “One Nation, One Grid”, unified transportation
tariff, etc, to improve logistics efficiency of the network
1.2 Modal Composition of Mobility
Despite efforts toward multimodality, as of 2025, India’s transport mix currently remains
significantly skewed in favour of road transport. However, with continued focus on enhancing
multimodality, a growing shift from road to other efficient modes is envisaged.
Passenger traffic: Roads account for ~78%, rail ~17%, air 4%, and metro accounts
for 1% of all traffic.
Freight traffic: Roadways carry 66%, railways 22%, waterways 8%, pipelines 4%,
and air only 0.06% of all freight traffic in the country.
This imbalance results in higher energy use, logistical costs, and emissions, particularly
compared to more efficient and sustainable modes like rail and inland waterways. For context,
while waterways account for ~25% of freight movement in China, in India it is only ~8%.
Meanwhile, in the EU overall, maritime freight accounts for more than two-thirds (67.4%) of
freight transport tonne-kilometres.
11
India can correct this imbalance by leveraging its underutilised natural transport assets such
as its 7,517 km coastline and 14,500 km of navigable waterways. Programmes like Sagarmala
seek to modernise ports and coastal infrastructure to reduce logistics costs. The upcoming
Vadhvan Port in Palghar, Maharashtra, for example, is expected to cut freight costs by 25%
for Northern and Western India, while decongesting the Jawaharlal Nehru Port (JNPT) in
Raigad. The Eastern Waterways Grid, which links Kolkata with Myanmar, is also creating
new corridors for the North-East.
Strategically linking mineral-rich states (like Chhattisgarh, Odisha, and Jharkhand) and
agriculturally productive regions (such as Uttar Pradesh, Punjab, and Madhya Pradesh) by
industrial corridors and ports through road, rail, pipelines, and waterways can catalyse new
growth zones. These include special economic zones (SEZs), inland logistics hubs, and rural Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 5
Introduction and Context
manufacturing clusters, all of which are critical to correcting regional imbalances and achieving
equitable growth.
Given the evolving economic landscape and rising mobility demands, the path forward lies in
leapfrogging conventional, siloed transport planning. India must craft a future-ready paradigm
that is multimodal, clean, inclusive, and digitally enabled, tapping all modes efficiently while
reducing overreliance on roads.
1.3 The Dual Imperative: Economic Growth and Environmental
Stewardship
India’s expanding mobility should sit at the intersection of two major national goals: rapid
economic development and environmental sustainability. Below is a snapshot of the current
scenario:
a. Lagging Mobility Metrics Amidst Rising Aspirations: India’s passenger kilometres
and tonne kilometres are rising but still lag behind global benchmarks. Heavy reliance
on private vehicles due to inadequate public transport leads to congestion, increased
fuel consumption, and inequality. Road freight dominates despite being costlier and
more polluting.
b. Infrastructure Modernization: Programs like Bharatmala, Sagarmala, and Gati
Shakti are modernising India’s multimodal transport grid with new highways, metro
systems, electric buses, and logistics corridors.
c. Hidden Costs: Emissions from the transport sector account for about 10% of overall
GHG emissions in the country in 2020, with road transport contributing around 90%
of the transport sector emissions. Rising motorisation brings with it air pollution,
traffic congestion, and higher crude oil imports that are already over 87% of total
supply. Electric mobility brings its own dependencies, especially on imported lithium
and battery components, and India’s coal-heavy power grid adds further complexity.
d. Urbanisation and Opportunity to Rethink Travel: With urbanisation projected to
rise from the current 36% to over 65% by 2070, cities must evolve through Transit-
Oriented Development (TOD) that is compact, connected urban zones that reduce
the need to travel long distances. Similarly, aligning industrial hubs with rail and
port hubs can cut freight distances and energy use.
e. Coordinated Governance: India’s transport governance involves numerous
specialised ministries. Enhanced coordination among roadways, railways, ports,
aviation, power, and urban planning bodies is essential to create integrated, efficient,
and sustainable mobility systems. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 6
Introduction and Context
f. Manufacturing and Mobility are Closely Interlinked: Manufacturing drives
demand for vehicles, fuels, and logistics, while requiring an efficient freight systems
to stay competitive. India’s logistics costs are quoted at 13–14% of GDP, versus
8–10% in China and the EU.
12
The first official assessment now estimates logistics
costs at 7.97% of GDP (₹24.01 lakh crore) in 2023–24, broadly aligning India with
advanced‑economy benchmarks. PM Gati Shakti and National Logistics Policy (2022)
aim to consolidate and deepen these gains by keeping logistics costs comparable to
global benchmarks i.e., 8% of GDP while improving service quality and multimodal
connectivity across road, rail, ports, and waterways
13
. Given that the automobile
industry contributes about 7.1% to the national GDP and nearly half of manufacturing
GDP, efficient and low‑carbon logistics will be critical as e‑commerce, industrial
output, and urbanisation sharply increase freight demand.
India’s Singularity: Challenges & Contextual Realities
8High Population Density and Urban Congestion: Unlike many developed nations,
India must decarbonise while managing high urban density, informal transit systems,
and affordability constraints.
8Two-Wheeler Dominance: India’s mobility is uniquely two-wheeler heavy - posing
both a challenge for electrification and an opportunity for rapid EV penetration in
cost-sensitive segments.
8Transition Risks: The shift from oil to critical minerals (e.g., lithium, cobalt) introduces
new dependencies. India must invest in battery recycling, alternative chemistries, and
secure supply chains.
8Regional Disparities: The North-East, Himalayan, and tribal regions face unique
connectivity and terrain challenges, requiring tailored, resilient, and inclusive mobility
solutions.
8Behavioural and Cultural Factors: Vehicle ownership is often aspirational. Shifting
mindsets toward shared, public and Non-Motorised Transport (NMT) will require
sustained behavioural nudges and urban design reforms.
1.4 Addressing Disparities
Disparities in access to transport services persist across geographies and demographics, often
limiting participation in the growth story. National averages on transport performance often
mask deep-rooted disparities in access, affordability, and opportunity — especially in rural
areas, socio-economically disadvantaged groups, and remote geographies. Bridging these
mobility gaps is a prerequisite for achieving resilient and sustainable transport systems. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 7
Introduction and Context
Beneath national averages lie sharp disparities:
Access to Public Transport: Low-income households, especially in rural and peri-
urban areas, lack access to affordable transport.
Geographic Barriers: India’s north-eastern and Himalayan regions face unique
topographic and infrastructure development challenges.
14
Aspirational Mobility: With India’s low car ownership of around 33 cars per 1,000
people, cars are still an aspirational commodity for most households. Bridging
affordability barriers for marginal segments is therefore critical, particularly
as first‑time buyers look to upgrade from two‑wheelers. The opportunity lies in
deliberately promoting smaller, affordable cars for these first‑time buyers, which can
provide significant co‑benefits in terms of higher fuel efficiency, lower emissions,
and reduced pressure on traffic and parking.
A truly transformative mobility vision must be rooted in equity, ensuring that no region or
group is left behind. For example, in Bhubaneswar, the Mo Bus and complementary Mo E-Ride
electric rickshaw feeder services, designed as part of an integrated, gender-responsive transport
network, significantly expanded safe and affordable mobility for women and transgender
commuters.
15
An inclusive transport strategy, thus, must ensure affordability, accessibility, and
coverage for all communities.
Achieving Net Zero by 2070 is a formidable task, but with strategic planning, international
collaboration, affordable finance, and broad participation from government, industry, and
communities, India’s transport sector transition can set a benchmark for emerging economies.
1.5 Institutional Mechanism: Inter-Ministerial Working Group on
Transport
The Inter-Ministerial Working Group (IMWG) on Transport is among the several Inter-
Ministerial WGs constituted by NITI Aayog to chart out a development vision aligned with
India’s commitment to become a Net Zero Emission nation by 2070.
This effort involves multiple working groups tasked with assessing long-term transition
pathways across key domains, macroeconomic aspects of transition, sectoral transformations
(transport, power, industry, buildings, and agriculture), climate finance (mitigation and
adaptation), critical minerals, R&D and manufacturing, and the social implications of transition.
The Inter-Ministerial Working Group on Transport has been mandated to assess the current state
of India’s mobility ecosystem, spanning passenger and freight demand, modal composition,
technological maturity and to recommend a comprehensive transition pathway through 2070. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 8
Introduction and Context
This vision must balance growth with environmental responsibility, while ensuring that
mobility remains accessible, affordable, and equitable. The composition of the committee
was as follows:
Chaired by: Dr. Anil Jain, Chairperson, Petroleum and Natural Gas Regulatory Board
(PNGRB)
Composition:
Representatives from Ministries/Departments: Road Transport & Highways,
Railways, Civil Aviation, Power, New & Renewable Energy, Petroleum & Natural
Gas, Ports Shipping & Waterways, Heavy Industry, MSME, and Bureau of Energy
Efficiency (BEE)
Industry and knowledge partners: Society of Indian Automobile Manufacturers
(SIAM), ICCT, RMI India, and TERI
To achieve this, the Working Group has:
Analysed transport demand driven by GDP growth across passenger and freight
segments
Examined the impact of modal shifts (private to public transport/ motorised to non-
motorised, etc.) on emissions.
Recommended pathways for accelerated adoption of clean fuels & technologies
(EVs, hybrids, biofuels, hydrogen, etc.)
Examined scope and policies for shifting to energy-efficient modes such as rail and
waterways
Examined the role of behavioural nudges in accelerating shift to sustainable mobility
solutions.
Explored financing instruments and incentive structures to scale green transport
infrastructure 2
TRANSPORT
SECTOR: SCALE,
STRUCTURE &
GROWTH DRIVERS 10Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport
2
Transport Sector:
Scale, Structure &
Growth Drivers
Transport is the backbone of India’s growth story: connecting workers to jobs, firms to
markets, and regions to each other at unprecedented scale. Every additional highway lane,
metro corridor, freight train and flight route has helped compress distance and time, supporting
economic expansion, urbanisation and rising incomes. Yet this very success has also driven
rapid growth in energy use and emissions. As India prepares for the next phase of development,
understanding the scale, structure and growth drivers of its transport sector is essential: it
reveals where demand is coming from, how different modes share the load, and which policy,
technology and investment choices can steer this engine of growth onto a low-carbon path.
2.1 Energy, Emissions and Infrastructure Investment
Globally, emissions from the transportation sector, as well as its proportion of total energy use,
have steadily increased over the past several decades. This sector accounts for almost 23% of
global CO
2
16. In India, the transport sector accounted for 10% of the total GHG emissions in
2020, while it contributed to 20% of final energy use.
2.1.1 Infrastructure Investment
As India’s economy continues to grow rapidly, the demand for logistics and transportation
infrastructure will rise, opening opportunities for investments in efficient and cost-effective
solutions. The current high cost of logistics underscores the potential for transformative
investments in the sector. Over the years, India has scaled up public investment in transport
infrastructure, supporting projects like the Golden Quadrilateral, Dedicated Freight Corridors,
and Mass Rapid Transport System to enhance connectivity and efficiency. Significant
investments have also been directed toward railways, aviation, and waterways, reflecting the
government’s commitment to a multi-modal transportation approach (Figure 2.1). Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 11
Transport Sector: Scale, Structure & Growth Drivers
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2004-05 2014-15 2024-25
Budget (INR Crore)
Aviation Ports, Shipping and Waterways
2004-05 2014-15 2024-25
Budget (INR Crore)
Road Railway
0
50,000
1,00,000
1,50,000
2,00,000
2,50,000
3,00,000
Figure 2.1: Growth in investments in public sector from 2004 to 2024 for roads, railways,
waterways and aviation
Source: Union Budget
17
Unlocking Scale: The Role of Public-Private Partnerships in India’s
Transport Transformation
Transforming India’s transport through metro expansion, logistics corridors, expressways,
multimodal parks, and clean mobility systems demand sustained, long-term capital flows that
far exceed public budgets.
This necessitates options such as Public-Private Partnerships (PPPs) that offer a catalytic pathway
to blend public intent with private investment and innovation, ensuring timely execution, cost
efficiency, and lifecycle asset management. Delhi, Mumbai, Hyderabad, and Bengaluru airports
are some examples of successful PPP models in the aviation sector.
PPPs enable de-risked, high-impact investments in EV infrastructure, smart urban transit, and
climate-resilient logistics, which are critical components of India’s Net Zero emissions and goal
of a Viksit Bharat by 2047.
To successfully execute PPP models, India should continue to foster transparent regulatory
regimes, bankable project pipelines, and fair risk allocation frameworks that attract institutional
and private capital at scale. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 12
Transport Sector: Scale, Structure & Growth Drivers
Golden Quadrilateral: Transforming India’s Mobility and Growth
The 2001 National Highways Development Project, particularly the Golden Quadrilateral (GQ)
marked a pivotal moment in Indian mobility by slashing travel times, cutting transport costs, and
unlocking economic momentum. Districts within 10 km of the GQ network saw manufacturing
output surge by nearly 49% in the years following its implementation, and substantial annual
savings were achieved in fuel and vehicle maintenance. These infrastructure gains spurred trade
and GDP growth.
18
By 2020, vehicle ownership rose to 242 per 1,000 as GDP per capita surpassed
INR 1,00,000. The 2017 Bharatmala Pariyojana continues this momentum, targeting 65,000 km of
road corridors to enhance connectivity, reduce logistics costs, and support economic expansion.
19
Transit-Oriented Development
Transit-Oriented Development (TOD) is a sustainable urban planning approach that integrates
land use and public transportation to create compact, walkable communities. Centred around
high-capacity transit systems such as suburban railway system, circular rail, metro, light rail,
or bus rapid transit, TOD promotes mixed-use development, reducing dependency on private
vehicles while enhancing accessibility and liveability.
While GDP growth drives transport infrastructure, unplanned expansion exacerbates congestion
and pollution. TOD aligns growth with mobility planning, as seen in metro projects in Delhi,
Bengaluru, and Mumbai. It promotes compact, walkable cities that cut emissions and boost
productivity. Satellite cities like Navi Mumbai and Noida are seen to ease urban pressure
with planned layouts, green infrastructure, and strong transit links, supporting balanced and
sustainable regional growth.
The USA Experience
India’s challenges are not unique. Countries like the United States faced similar issues during
periods of rapid economic growth.
Transit-Oriented Development (TOD) in cities like Denver and Portland successfully
integrated land-use planning with transportation, promoting mixed-use development
around transit hubs. This reduced reliance on private vehicles, curtailed emissions, and
fostered urban growth in sustainable ways. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 13
Transport Sector: Scale, Structure & Growth Drivers
Japan: Efficient Urban Planning and Rail Networks
Japan’s cities, such as Tokyo and Osaka, exemplify the success of TOD. Their dense
urban centres are organised around extensive rail networks such as the Tokyo Metro
and Japan Railways. Mixed-use developments around stations integrate residential,
commercial, and recreational spaces, significantly reducing dependence on private
vehicles.
India can draw valuable lessons from such examples to devise actionable policies tailored to its
unique demographic and economic contexts.
2.2 Transport Demand
In 2025, total passenger travel was estimated at 6,410 billion passenger-kilometres (BPKMs),
with road transport accounting for 78%. Rail followed at 17%, while air travel and metro
systems contributed 4% and 1%, respectively.
Freight transport too displayed a similar trend, with a total of 4,661 BTKMs of which roadways
carried 66% of the freight, rail carried 22%, and waterways 8%. Pipelines accounted for
3.6%, while air freight remained negligible at 0.06% of the total. These figures indicate that
a large share of passenger and freight movement currently takes place through road-based
transport, while railways continue to play a significant and dependable role in the nation’s
transport ecosystem. Rail remains the largest mode of public transport and a crucial backbone
for long-distance and bulk freight movement. The potential of waterways and pipelines in the
transport mix is unrealised. Figure 2.2 highlights that road transport remains the dominant
mode globally. Countries with stronger rail and waterways share long-term efficiency of
diversified modal system. India should aspire to strengthen rail and waterways to reduce
over-dependence on road transport.
Multi-Modal Transport Network Initiative
The PM Gati Shakti initiative is the cornerstone of India’s efforts to advance its multimodal
transportation network to enhance logistics efficiency and support economic growth. Under the
initiative, 434 projects have been identified, totalling an investment of INR 11.17 lakh crore.
This initiative aims to bolster multimodal connectivity and streamline logistics operations. The
development of Multimodal Logistics Parks (MMLPs) is central to this strategy. These large-scale
facilities integrate transportation by road, rail, air, and sea into unified hubs, facilitating efficient
cargo movement. The first MMLP is being developed in Jogighopa, Assam, to serve as a key
logistics centre for India’s northeastern region and neighbouring countries. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 14
Transport Sector: Scale, Structure & Growth Drivers
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
19902019199020191990201919902019
Germany France United
State s
Japan
Modal Share (Passeng er)
Road Rail
*only includes r oad & rail
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
19902019199020191990201919902019
Germany France United
State s
Japan
Modal Share (Freight)
Road Rail Wate rways Pipeline
Figure 2.2: Modal share of passenger and freight transport for different countries
Source- OECD
20
2.2.1 Modes of Transportation
Road
Road transport is India’s dominant mode for passenger and freight movement, supported by
over 63 lakh km of roads in 2022, including approximately 1.46 lakh kilometres of National
Highways
21
. India has one of the world’s largest road networks in the world.
India had 391.07 million registered vehicles as of 31 March 2025, of which 356.22 million
(91.1%) were personal vehicles and 34.86 million (8.9%) were commercial vehicles. Total
registrations have increased 15 times since 1990; driven by sustained economic growth,
rapid urbanization, population increase, improved roads and infrastructure, expansion of
the automobile industry, and easier access to vehicle finance, total registrations have risen
nearly 15-fold since 1991. Two-wheelers dominate the composition, rising from 14.2 million
registrations in 1991 to 286.75 million in 2025, while cars, jeeps, and taxis grew from 2.95
million to 56.3 million over the same period (Figure 2.3).
22 Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 15
Transport Sector: Scale, Structure & Growth Drivers
0
50
100
150
200
250
300
350
400
450
1990 1995 2000 2005 2010 2015 2020 2025
(in million vehicles)
Total Vehicles Registered
2Ws Cars, Jeeps & Taxis Buses Goods Ve hicles Others
Figure 2.3: Increasing vehicle ownership since 1990
Source: Vahan Portal 2025 & Road Statistics 2019-20
Figure 2.4 shows that as India’s GDP per capita has risen over time, the number of vehicles
per 1,000 people has also increased, indicating a clear link between economic growth, higher
incomes, and greater motorization.
0
50
100
150
200
250
300
13760
1951 1961 1971
1981
1991
2001
2011
2020
16780 19871 21430 29708 42059 68557 107774
Vehicles per 1000 population
GDP Per Capita, INR
Figure 2.4: Vehicles per 1000 population vis-a-vis GDP/capita for India
Source: Road Statistics 2019-20 and India’s population projections based on MoHFW till 2036
As shown in Figure 2.5, vehicle ownership remains the highest in advanced economies, with
New Zealand and the United States exceeding 860 vehicles per 1,000 people, and countries
like Germany, Japan, and Canada reporting between 600 and 700 vehicles per 1,000 people.
These levels reflect high incomes, extensive road infrastructure, and decades of car-centric
urban development along with rising emissions. India, therefore has an opportunity to chart
a different path by prioritising public transport, e-mobility, and compact urban development,
achieving its mobility goals while curbing pollution, emissions, and energy demand. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 16
Transport Sector: Scale, Structure & Growth Drivers
0
100
200
300
400
500
600
700
800
900
1000
United
States
New
Zealand
Canada Germany China Brazil
Vehicles per 1,000 People
Figure 2.5: Representation of vehicles per 1000 population for developed countries
Source: OICA – International Organisation of Motor Vehicle Manufacturers. Retrieved November 28, 2025, from https://oica.net/
23
Fuel mix in road transport: Road transport in India is heavily dependent on fossil fuels–
primarily petrol and diesel, which accounts for more than 80% of the transport sector’s energy
consumption. India’s focus on reducing fossil dependence has led to an increased uptake of
alternative clean fuels and technologies such as, bio-CNG, ethanol, biodiesel and, hybrids and
EVs. EV adoption is growing rapidly, especially in the 2W and 3W segments, with policies
supporting battery swapping, incentives under Faster Adoption and Manufacturing of Hybrid
and Electric Vehicles (FAME) scheme (now PM E-DRIVE scheme), and state EV policies.
For freight, LNG and CNG along with CBG to play a key role in reducing emissions, with
green hydrogen emerging as a long-term zero-emission alternative for heavy-duty vehicles.
Railways
Rail is the most energy-efficient mode for both freight and passenger transport. Between 2013-
14 and 2023-24, rolling stock grew from about 3.3 lakh to 4.35 lakh units, while the share of
electrified broad-gauge routes jumped from 33% to 90%, sharply reducing diesel dependence.
Aiming to become a Net Zero carbon emitter by 2030 through full electrification, renewable
energy integration, and energy-efficient operations, Indian Railways is also modernising via
initiatives such as Vande Bharat trains and Dedicated Freight Corridors (DFCs), enhancing
speed, capacity, and efficiency and encouraging a modal shift from road to rail
24
. Additionally,
pilot projects on hydrogen fuel cell-based trains and battery-powered locomotives are underway
as part of Indian Railways’ Net Zero ambitions. While India invests across all transport sectors,
rail receives the largest share of public funds due to limited private participation. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 17
Transport Sector: Scale, Structure & Growth Drivers
Dedicated Freight Corridors
India’s High Density and Highly Utilised Networks (HDN & HUN), covering 41% of route
length and carrying 81% of freight, face severe congestion as mixed traffic slows freight trains
by nearly half. To address this, the Dedicated Freight Corridors (DFCs), approved in 2006,
were developed to enhance freight efficiency. With 96.4% of the planned 2,843 km network
now complete (1,337 km Eastern and 1,506 km Western)
25
, DFCs enable uninterrupted freight
movement at around 40 kmph. By December 2022, freight speeds averaged 40.7 kmph on
DFCs, compared to 18.8 kmph on the conventional network. Offering higher capacity and
double-stack container trains, DFCs improve port connectivity and promote a shift from road
to rail, significantly enhancing logistics efficiency across India.
Metro
The 2017 Metro Rail Policy enables Central funding for viable, state-proposed metro projects,
helping India build an operational metro network of over 1,000 km by January 2025
26
, one of
the largest globally. Metros are easing urban congestion by linking key demand centres with
airports and railway stations. For instance, an IIT-Bombay study of Mumbai Metro found
average time savings of 26 minutes per trip, shifting departure patterns and freeing up road
space during peak hours. Moreover, the Mumbai Metropolitan Region Development Authority
(MMRDA) projects that congestion in Mumbai will shrink from 137% in 2017 to 33% by
2031 as metro reach grows.
27
High Speed Rail (HSR) Potential: Mumbai-Ahmedabad High Speed
Rail (MAHSR) Project
The Mumbai-Ahmedabad High Speed Rail (MAHSR) Project (508 km) is under
execution with technical and financial assistance from Government of Japan. The Project
is passing through the States of Gujarat, Maharashtra and Union Territory of Dadra &
Nagar Haveli with 12 stations planned at Mumbai, Thane, Virar, Boisar, Vapi, Billimora,
Surat, Bharuch, Vadodara, Anand, Ahmedabad and Sabarmati. The Gujarat portion of the
corridor between Vapi and Sabarmati is planned to be completed by Dec, 2027. The entire
project (Maharashtra to Sabarmati section) is expected to be completed by Dec, 2029. An
overall Physical progress of 54.51% has been achieved upto 30/09/2025.
In order to expand the HSR network in India beyond MAHSR corridor, Detailed Project
Report (DPRs) for seven corridors have been prepared by National High Speed Rail
Corporation Limited (NHSRCL) which are under examination. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 18
Transport Sector: Scale, Structure & Growth Drivers
Aviation
India is the world’s third-largest domestic aviation market with rapid growth in airports (74
to 148), aircraft (448 to 674), and domestic passengers (85.2 to 136 million) between 2014-
15 and 2022-23
28, 29, 30
. Domestic traffic surged 61.6% in 2022-23 after a sharp drop during
the period 2020-21
31
, as illustrated in Figure 2.6. In 2019, domestic aviation had a passenger
load factor of 90%, a significant rise from the early 2000s, when the load factor sometimes
dropped to 50%
32
.
0
20
40
60
80
100
120
140
160
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
Passenger kilometre (billi on)
Figure 2.6: Trend of domestic air passenger traffic
Source: Handbook of Civil Aviation Statistics
Figure 2.7 below shows that the domestic cargo volumes have increased nearly four-fold since
2002-03. The aviation expansion will face challenge to low-carbon growth, as ATF, its primary
fuel, has a high lifecycle emissions intensity of about 88.7 gCO₂e/MJ
33
.
0
100
200
300
400
500
600
700
800
Cargo carried ('000 tonnes)
Figure 2.7: Trend of cargo carried by the domestic aviation sector
Source: Handbook of Civil Aviation Statistics, 2022-23 Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 19
Transport Sector: Scale, Structure & Growth Drivers
Waterways
India’s inland waterways and coastal shipping are cost-effective and offer good potential as
low-emission freight modes. Waterways’ freight share reached 8% in billion tonne-kilometres
(BTKMS) by 2025, with gross tonnage rising from 1.19 to 1.72 billion tonnes and the fleet
from 846 to 1,039 vessels (2014–2024); Paradip Port handled the highest coastal cargo in
2022–23.
Inland and coastal vessels currently run mainly on diesel, but there is a growing push toward
cleaner alternatives. This includes CNG and LNG-powered barges, biofuels, shore-to-ship
power, hybrid-electric propulsion. There are also emerging options like green hydrogen and
methanol for selected pilot projects and future green shipping corridors.
Pipelines
Pipelines are among India’s most energy‑efficient, low‑cost, and low‑emission modes for
transporting hydrocarbons and gaseous fuels. The country now has over 25,000 km of
operational natural gas pipelines, with plans to expand this to about 35,000 km under the “One
Nation, One Gas Grid” initiative. In addition, more than 34,500 km of petroleum pipelines are
in place, including roughly 10,447 km of crude oil pipelines, 5,231 km of LPG pipelines, and
about 18,899 km of other petroleum product pipelines, with a further 4,300 km of petroleum/
product pipelines under construction. They enable cleaner mobility by supporting wider use
of CNG and LNG in freight and public transport. They are being future-proofed to carry
fuels like ethanol blends, Compressed Bio-Gas (CBG), SAF, and green hydrogen. This will
position them as a key backbone for hydrogen hubs, bio-CNG corridors, and India’s Net Zero
by 2070 goals.
2.3 Alternative Clean Fuels, Technologies and their Trends in
Transportation
2.3.1 Electric Vehicles
Electric Vehicles are an important option in the global transformation toward sustainable
transportation. As technological advances drive down battery costs and governments introduce
supportive policies, EV adoption continues to increase.
In India, the shift is visible and as shown in Figure 2.8, 2Ws have grown from 0.1% of new
registrations in FY 2020 to 5.38% in FY 2024, while electric 4Ws increased from 0.1% to
around 5% in 2024. The 3W category has seen a remarkable jump–from 17.6% to 54.2%
in the same period, even reaching 22.8% when excluding e-rickshaws and e-carts. The
FAME-II scheme accelerated this transformation, and the recently launched FAME-III aims
to strengthen the ecosystem with wider incentives for charging, battery swapping, and multi- Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 20
Transport Sector: Scale, Structure & Growth Drivers
segment coverage. However, electrification of heavy-duty trucks remains challenging due to
costs and range limitations.
0%
10%
20%
30%
40%
50%
60%
FY 2020 FY 2021 FY 2022 FY 2023 FY 2024
EV penetration
2W 3W 4W
Figure 2.8: EV sales penetration (% of new registrations) in India across 2W, 3W and 4W
Source: Vahan Portal
34
EV Adoption in China
China exemplifies a highly successful EV adoption story, emerging as the global leader in electric
mobility. 24% of new car sales in 2024 were electric and 20% are hybrids. This growth has been
driven by substantial government incentives, strategic industrial policies, and the large-scale
rollout of charging infrastructure. In 2021, China accounted for nearly half of the world’s electric
vehicle sales; this share grew to almost two-thirds in 2024
35
. Domestic manufacturers like BYD
and NIO have gained prominence, facilitating the rapid electrification of both passenger and
commercial vehicles. China’s EV revolution is crucial in combating urban air pollution, creating a
robust industrial ecosystem, and solidifying its position as a global clean-technology powerhouse.
Not only China, but also major markets around the world are embracing both electric
and partial electric i.e. hybrid technologies to decarbonise the auto sector.
xEV Technology Penetration Globally CY’24
Major Passenger Vehicles
Market
Battery Electric Vehicle
Penetration
Hybrid Penetration
China24%20%
USA8%12%
EU12%15%
Global Average13%14%
Source: Nomura Research Institute
xEV: Electrified vehicles (generic term for all types of electric vehicles i.e., Battery EV, Strong Hybrid EV, Range Extender EV, Plug-in
Hybrid EV) Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 21
Transport Sector: Scale, Structure & Growth Drivers
EV Adoption in Norway
Norway, on the other hand, has set a global benchmark for EV penetration, achieving the
highest market share worldwide, with electric vehicles constituting over 80% of new car sales.
Aggressive incentives, tax exemptions, and investments in a comprehensive charging network
have significantly boosted consumer confidence. Norway’s EV adoption is powered by a broad
incentive framework-spanning exemptions on VAT and import/purchase taxes, reduced or waived
road and toll charges, free municipal parking, bus-lane access, company car tax breaks, and zero-
emission public procurement. This illustrates how deliberate governmental support can rapidly
transform national transport systems and consumer preferences, accelerating the shift towards
sustainable mobility. However, the key difference is that the market size of Norway is 1.3 lakh
cars compared to 43 lakh car market in India.
Range-Extended Electric Vehicles (REEVs) as a Transitional
Enabler in Electrification Strategy
Globally, mature EV markets such as China show that consumer concerns around range and
charging convenience are driving diversification beyond BEVs. Range-Extended Electric Vehicles
(REEVs), a BEV-derivative technology, are gaining significant traction, growing from 4% to 13%
of New Energy Vehicle sales between 2021 and 2025 in China. REEVs operate as electric-first
vehicles, with propulsion entirely via an electric motor and an onboard internal combustion engine
functioning only as a generator when battery charge is low.
From an emissions perspective, REEVs can deliver meaningful near-term benefits. Urban usage
is predominantly electric, resulting in zero tailpipe emissions comparable to BEVs. In mixed
and highway usage, the engine operates intermittently at constant load and high efficiency,
leading to approximately 60–70% lower CO₂ emissions per kilometre compared to conventional
ICE vehicles in real-world driving. REEVs may represent a logical diversification of India’s
electrification strategy, and complements pure electrification until the wider ecosystem matures.
2.3.2 Biofuels in Transportation
Biofuels hold immense promise for India’s dual goals of energy security and emission reduction.
Through the National Biofuel Policy and Ethanol Blended Petrol (EBP) Programme, India
achieved its 20% ethanol blending target ahead of schedule
36
. Ethanol derived from surplus
sugarcane and grains has improved farmer incomes while promoting energy diversification. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 22
Transport Sector: Scale, Structure & Growth Drivers
Brazil Biofuel Program
Brazil stands out globally as a remarkable success story in biofuels, particularly ethanol derived
from sugarcane. The nation’s Proálcool program, initiated in 1975, has positioned the country as a
global leader in sugarcane-based ethanol production. Ethanol output surged from 0.6 billion litres in
1975-76 to 3.4 billion litres in 1979-80, reaching 12.7 billion litres by 1992. Governmental support
through mandates, subsidies, and infrastructure investments, alongside the widespread adoption
of flex-fuel vehicles, significantly reduced reliance on imported petroleum and lowered carbon
emissions. The ethanol blend in gasoline has varied over time, reaching up to 25% during certain
periods. As of 2025, Brazil is considering increasing the ethanol blend to 30% (E30), with tests
indicating consistent performance and environmental benefits. Effective agricultural management,
favorable climatic conditions, and continuous technological innovations have reinforced Brazil’s
status as a biofuel powerhouse, offering a replicable model for other developing economies.
Despite these achievements, challenges persist—feedstock availability, food versus fuel
competition, and fragmented logistics continue to restrict scaling. Addressing these requires
investment in advanced biofuel technologies, stronger supply chains, and policy-driven
research.
Harnessing Biofuels for a Circular Carbon Economy: A Pathway to
Sustainable Transport
The Circular Carbon Economy (CCE) promotes sustainability by keeping carbon in a closed loop-
reducing, reusing, recycling, and removing it across sectors like energy, industry, and transport.
Biofuels exemplify this principle. The CO₂ released during their combustion is not new to the
atmosphere; it originates from carbon absorbed by biomass through photosynthesis. When burned,
this carbon simply re-enters the atmospheric cycle, making biofuels effectively carbon-neutral
under optimal conditions. However, the carbon neutrality must be tested and verified on a Life
Cycle Assessment (LCA) basis for each fuel pathway.
Unlike fossil fuels, which release ancient carbon stored underground, biofuels recycle atmospheric
carbon, helping to curb net emissions. When integrated with Carbon Capture and Storage (CCS),
they can even achieve negative emissions, making them a key enabler of the transition toward a
circular and sustainable low-carbon future.
Compressed Bio-Gas (CBG): It represents a waste-to-energy solution. Produced from
agricultural residues, municipal waste, and other organic materials, CBG can seamlessly
integrate with existing CNG infrastructure. Under the SATAT (Sustainable Alternative
Towards Affordable Transportation) initiative, India targets 5% CBG blending by 2028-29
37
.
This initiative promotes waste valorization, supports rural livelihoods, and strengthens the
circular economy. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 23
Transport Sector: Scale, Structure & Growth Drivers
CBG: A High-Potential Fuel for India’s Net Zero Mobility
Compressed Bio-gas (CBG) is produced by converting organic waste such as crop residues, cattle
dung and food waste into biogas, which is then purified and compressed to make a fuel that can
directly substitute CNG in vehicles. Recent lifecycle studies, indicate Bio‑CNG as a vehicular fuel
in India that can operate as a carbon‑negative fuel over its life cycle when methane avoidance
and co‑product benefits are fully accounted for
38
.
The International Energy Agency (IEA) estimates India’s technical biomethane/CBG potential
at about 87 billion cubic metres per year, giving India a advantage as a global leader in biogas
and an opportunity to cut transport emissions and move towards net‑zero mobility. Scaling
CBG production and blending it into the existing CNG network can thus deliver deep emissions
reductions while simultaneously supporting rural incomes, waste management, and energy security.
Sustainable Aviation Fuel (SAF): SAF is important for aviation industry to achieve its
decarbonisation goals. Derived from second-generation ethanol and other advanced feedstocks,
SAF can reduce greenhouse gas emissions by up to 80% compared to traditional jet fuel
39
.
Globally, aviation contributes 3% of total CO₂ emissions and 12% of transport emissions, but
its climate impact may be two to four times higher when non-CO₂ pollutants are considered.
To achieve the International Civil Aviation Organization’s (ICAO) aspirational goal of
Carbon Neutral Growth from 2020 onward, ICAO has implemented the Carbon Offsetting
and Reduction Scheme for International Aviation (CORSIA), a market-based measure aimed
at reducing carbon emissions from international aviation. As a member state of ICAO, India
is obligated to comply with CORSIA’s mandatory phase starting in 2027 (Ministry of Civil
Aviation (MoCA), 2023). The National Biofuels Coordination Committee has set blending
targets for SAF at 1% for 2027 and 2% for 2028, applicable to international flights (MoPNG,
2023). With significant investments underway and pilot projects already operational, SAF is
expected to not only help airlines comply with CORSIA but also stimulate local green fuel
industries, enhancing energy security and contributing to India’s overall emissions reduction
goals.
2.3.3 Green Hydrogen and Its Derivatives
Green hydrogen is considered an important option for decarbonising hard-to-electrify sectors
such as long-haul transport, heavy-duty trucks and shipping. Green hydrogen is produced
through electrolysis powered by renewable energy
40
. The Global electrolyser capacity for
green hydrogen production reached 1.4 GW by the end of 2023
41
.
Germany has introduced hydrogen-powered trains, while Japan and South Korea have
developed fuel-cell vehicle networks. Additionally, hydrogen internal combustion engines (H2-
ICEs) are under development, achieving thermal efficiencies of approximately 40%. India’s Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 24
Transport Sector: Scale, Structure & Growth Drivers
National Green Hydrogen Mission aims to achieve 5 MTPA production capacity by 2030.
Current pilots include 37 hydrogen vehicles (buses and trucks), and nine refuelling stations.
Success in these initiatives will depend on proactive policymaking, targeted fiscal incentives,
international technology collaborations, and robust regulatory frameworks to position India
as a competitive global hub for green hydrogen.
2.3.4 Natural Gas
Compressed Natural Gas (CNG) has emerged as a key fuel option, supported by targeted
government policies and sustained investments in refuelling infrastructure. Delhi has been
an early mover in this transition, with early large-scale deployment of CNG in buses, taxis
and auto-rickshaws. As per high-level expert committee report of PNGRB, Delhi registered
around 6.5 Lakh CNG vehicles. Assuming these replaced their conventional petrol and diesel
counterparts, Delhi has avoided approximately 40 Lakh tonnes of CO₂ and more than 2,500
tonnes of PM emissions. The CO₂ savings are equivalent to planting more than 70 Lakh
trees across Delhi, in addition to significant positive benefit for public health
42
. Empirical
studies indicate that CNG buses can emit up to 46 times less particulate matter (PM) than
comparable diesel buses
43
. However, wider adoption of CNG hinges on expanding refuelling
infrastructure, streamlining grid injections, and securing long-term, affordable gas supplies.
Figure 2.9 shows the change in CNG vehicle penetration as percentage of new registrations
across light, medium, and heavy goods vehicle (LGV, MGV, and HGV) categories.
3.8%
5.3%
15.1%
12.9%12.3%
10.8%
19.3%
37.2%
20.5%
10.7%
0.5%
1.8%
5.9%
2.9%
1.8%
FY 2020 FY 2021 FY 2022 FY 2023 FY 2024
LGV MGV HGV
CNG Vehicle Penetration %
0%
5%
10%
15%
20%
25%
30%
35%
40%
Figure 2.9: CNG vehicle sales penetration among LGVs, MGVs, and HGVs*
Source: Vahan Portal
* LGVs, MGVs, and HGVs: Light, Medium, and Heavy Goods Vehicles Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 25
Transport Sector: Scale, Structure & Growth Drivers
Liquefied Natural Gas (LNG) is simultaneously gaining prominence as a lower-emission fuel
option for heavy-duty vehicles (HDVs), long-haul freight and shipping, where energy density
and range requirements are more demanding. Compared to conventional marine fuel oil or
diesel, LNG can significantly reduce emissions, making it a technically attractive bridge
solution for hard-to-abate segments. Countries such as China and the United States have
already developed LNG “corridors” with dedicated refuelling infrastructure along key freight
routes, enabling reliable logistics chains.
In India, LNG adoption remains at a relatively early stage despite initiatives such as the plan to
develop around 50 LNG stations along the Golden Quadrilateral. Key hurdles include limited
pipeline connectivity from underutilised LNG terminals, high capital costs for cryogenic
storage, dispensing, and fuel tank of vehicle, a sparse refuelling network creating a demand–
supply gap, and complex multi-agency approvals.
China’s LNG Growth Story in HDVs: A Model for Clean Transport
Over the past decade, China has rapidly scaled the adoption of Liquefied Natural Gas (LNG)
in the heavy-duty vehicle (HDV) segment, emerging as the world’s largest LNG truck market.
Driven by a powerful mix of policy support, economic incentives, and infrastructure development,
the country’s LNG journey offers valuable insights.
Key Growth Milestones
Over 600,000 LNG HDVs on road (as of 2023) – accounting for more than 90% of
the global LNG truck fleet. (Source: IEA, 2023; S&P Global)
More than 2,000 LNG refueling stations established nationwide, strategically located
on high-traffic freight corridors. (Source: NGV Global News, 2022)
LNG trucks accounted for nearly 13% of all new HDV sales in 2021, rising from 4%
in 2017. (Source: IEA, “Global EV Outlook 2022” – LNG Market Trends)
LNG prices were consistently 20–30% cheaper than diesel during peak demand periods
(2020–2022), fueling rapid adoption. (Source: China National Petroleum Corporation
– CNPC reports)
China’s approach—coordinated government support, scale-driven cost optimization, and clear
policy signals—has made LNG HDVs not just viable, but attractive. China seeded both supply
and demand in parallel. For nations seeking cleaner freight transport without waiting for full
electrification, LNG can offer a scalable, near-term bridge. 3
CURRENT POLICY
LANDSCAPE IN THE
TRANSPORT SECTOR 28Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport
3
Current Policy
Landscape in the
Transport Sector
Achieving Net Zero transport emissions by 2070 will require a robust, multifaceted policy
framework tailored to India’s needs. Key strategies include promoting Transit-Oriented
Development (TOD) in cities, shifting travel to public and non-motorised modes, accelerating
the adoption of clean fuels and electric vehicles (EVs), and enforcing stringent efficiency
and emission norms. This chapter examines the global policy landscape driving transport
decarbonisation and India’s own policy initiatives, identifying how they converge and
where gaps remain. Behavioural nudges and successful case studies are also examined as
complementary instruments for steering India’s mobility toward sustainability.
3.1 Global Trends in Transport Decarbonisation Policy
Globally, governments are enacting ambitious policies to curb transport emissions.
Vehicle electrification: The European Union (EU) has announced that all new cars sold from
2035 onward to be zero-emission, effectively phasing out new petrol and diesel vehicles.
However, based on the reassessment, the target has now been relaxed slightly. Several countries
and states have similar targets – for example, the UK’s Zero-Emission Vehicle (ZEV) mandate
requires 100% of new car and van sales to be zero-emission by 2035
44
, and California in the
U.S. has adopted a 2035 phase-out of new combustion car sales. In China, policymakers use
a dual-credit system: automakers must meet escalating New Energy Vehicle (NEV) credit
targets of 28% in 2024 and 38% in 2025, which is expected to translate to at least 20% of
new car sales being electric by 2025 – aligning with China’s official goal
45
. Early-adopter
countries like Norway already demonstrate what’s achievable: supported by incentives and
charging infrastructure, 93% of new cars sold in Norway in 2023 were electric (85% fully
battery-electric)
46
, showing a near-total shift in the market. The United States in 2022, adopted
a strong incentive-driven approach through the Inflation Reduction Act (IRA), which provided
consumer tax credits (up to USD 7,500) for EV purchases and generous production credits for Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 29
Current Policy Landscape in the Transport Sector
domestic EV battery manufacturing, spurring investment in clean vehicles. More recent actions
under the Trump administration, however, have signaled a rollback of these measures, creating
uncertainty for manufacturers and investors and potentially moderating the momentum of EV
adoption.
Fuel decarbonisation policy. The EU’s Renewable Energy Directive (RED) has set binding
targets for renewable fuel use in transport. Under the latest RED III update, EU countries
must achieve roughly 29% renewable energy in transport by 2030 (or equivalently a 14.5%
reduction in fuel carbon intensity)
47
. This includes a dedicated sub-target of at least 5.5%
coming from advanced biofuels and renewable hydrogen
48
. (RED II had previously mandated
14% renewable transport energy by 2030 with a 3.5% advanced biofuel sub-share.) Many
European nations also enforce blending mandates for biofuels to meet these goals. For example,
Germany, France, and others require increasing shares of ethanol and biodiesel blends in road
fuels, while the EU’s new ReFuelEU Aviation rules mandate blending of sustainable aviation
fuels reaching 6% by 2030 and 20% by 2035
49
. These measures are pushing fuel suppliers to
scale up low-carbon fuels and reduce reliance on fossil oil.
Fuel economy and emission standards. The EU has the tightest CO₂ emission rules, requiring
a 55% cut in new‑car emissions by 2030 compared to 2021 levels and a 100% cut (0 g/km) by
2035. China’s latest light‑duty rules push average fuel consumption for new passenger vehicles
to 4 L/100 km on New European Driving Cycle (NEDC) test by 2025. This is backed by
New Energy Vehicle (NEV) credit mandate which requires automakers to meet annual credit
targets. Eligible technologies include battery electric vehicles (BEVs), plug-in hybrid electric
vehicles (PHEVs), fuel-cell vehicles (FCVs), and range-extended electric vehicles (REEVs).
Beyond regulations, many countries are supporting infrastructure and modal shift initiatives.
For instance, Japan and South Korea are investing heavily in hydrogen fuel cell vehicle
deployment (especially for trucks and buses) alongside EV rollouts, as part of goals to reach
carbon-neutral transport by 2050. Cities around the world are also integrating transport
networks and experimenting with innovative measures: Singapore has combined its mass rapid
transit, buses, and ride-sharing under a unified payment system with real-time information,
alongside policies like congestion pricing, to make car-light living practical. London and
several European cities have introduced “ultra-low emission zones” and high parking fees to
nudge commuters toward public transit and active travel. These international examples provide
valuable comparisons and cautionary tales as India charts its own path.
3.2 India’s Transport Sector Policy Interventions
Over the past decade, India has launched a comprehensive set of policies to promote cleaner
mobility. These can be grouped into three broad categories: (a) Emission & efficiency Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 30
Current Policy Landscape in the Transport Sector
standards, (b) Fuel and technology transition policies, and (c) Infrastructure & modal shift
initiatives. Together, these measures aim to improve vehicle performance, accelerate the uptake
of alternative fuels and EVs, and enhance the overall efficiency of the transport system.
3.2.1 Emission & Efficiency Standards
India’s framework for cleaning up road transport rests on three complementary levers:
a. Bharat Stage (BS) emission norms and fuel quality standards sets limits for local
air pollutants from new vehicles.
b. Corporate Average Fuel Efficiency (CAFE) norms cap fleet-average grams CO₂/
km and push efficiency.
c. National Vehicle Scrappage Policy (2021) retires old, high-emitting vehicles and
refreshes the fleet.
Together, these instruments tighten standards for new vehicles, fuels, and the existing fleet,
steadily reducing both air pollution and CO₂ intensity.
Table 3.1: Key policies and standards on vehicle emissions and fuel efficiency
Pillar Instrument
Scope &
Mechanism
Key Milestones
Role in Emissions /
Efficiency
Tailpipe
emission
limits & fuel
quality
Bharat
Stage (BS)
norms
Euro-aligned
standards for new
vehicles, caps
NOx, PM, CO,
HC. Applied at
type-approval
for all new ICE
vehicles.
India 2000 (≈ Euro 1)
– first national norms.
BS-II (2001–05),
BS-III (to 2010),
BS-IV nationwide by
2017. BS-VI from
Apr 2020 (skipping
Euro 5), BS-VI Stage
2 (BS6.2) with Real
Driving Emissions and
advanced On-Board
Diagnostics (OBD)
from Apr 2023
50
.
Sharp cuts in local
pollutants, especially
from diesel vehicles;
The leap from BS-IV
to BS-VI norms in
India for diesel cars cut
NO
X emission limits by
about two-thirds (≈68%)
and PM limits by over
80%
51
.
Fuel
quality
standards
Align petrol/diesel
quality with BS
norms, where
key parameter is
sulfur content.
Coordinated with BS
rollouts. BS-VI fuels
at 10 ppm Sulfur
nationwide from
2020.
Low-sulfur fuels
enable advanced after-
treatment, lower soot
and sulfate formation,
and directly improve
urban air quality from
new fleets. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 31
Current Policy Landscape in the Transport Sector
Pillar Instrument
Scope &
Mechanism
Key Milestones
Role in Emissions /
Efficiency
CO
2 & fuel-
efficiency
standards
CAFE
norms
(fleet-
average
CO
2/km)
Applies to
manufacturers’
new passenger-
vehicle fleets
capping
average CO₂/
km, incentivise
efficient engines,
light-weighting,
hybrids/EVs.
Phase 1 (2017–2022):
130 g CO
2/km. Phase
2 (2022–2027):
113 g CO
2/km.
Future phases under
discussion to align
with global best
practice.
52
Reduces fuel
consumption per
km; push technology
upgrades and higher
share of hybrid/EV
models. Current rules
give limited explicit
credit for biofuels,
flagged as an area for
refinement.
Fleet renewal
/ end-of-life
management
National
Vehicle
Scrappage
Policy
(2021)
53
Systematic
retirement of old
and unfit vehicles
via mandatory
fitness tests
and authorised
scrappage centres.
Commercial vehicles
>8 yrs and private
vehicles >15 yrs must
undergo automated
fitness tests; failing/
unfit vehicles are
deregistered and
scrapped. Owners
receive road-tax
rebates, waived
registration fees on
new vehicles, and
scrap value.
Expected to cut
emissions from replaced
vehicles by 25–30%,
improve average fleet
fuel economy and safety,
and create a formal
recycling industry
(recovered metals,
jobs, and new-vehicle
demand). Public fleets
and STUs are early
adopters, scrappage
centres are being rolled
out across states.
3.2.2 Fuel and Technology Transition Policies
India’s transport-fuel strategy extends well beyond fossil-fuel efficiency. It follows a multi-
track pathway including biofuels, biogas, natural gas, green hydrogen, and gaseous fuels
(CNG/LNG) to cut both tailpipe and lifecycle CO₂. These measures complement vehicle-
efficiency norms by lowering the carbon intensity of fuels, while also building new domestic
energy industries that reduce crude-oil dependence.
Table 3.2: Key policies and programs enabling fuel transition in transport sector
Key Instrument /
Programme
Mechanism & Scope
Key Milestones
& Targets
Progress & Highlights
Ethanol
(E20)
National Policy
on Biofuels
(2018, rev. 2022)
& Ethanol
Blended Petrol
(EBP)
Mandates ethanol
blending in petrol,
diversifies feedstock
(sugarcane, maize,
damaged grain) with
assured pricing and
OMC procurement.
E20 Target
advanced from
2030 to 2025-26.
E20 achieved by
mid-2025 (20%
blend vs 2% in
2013).
54
E20 reduces tank-to-
wheel CO₂ by 10-13%
55
,
improves octane and rural
income linkages. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 32
Current Policy Landscape in the Transport Sector
Key Instrument /
Programme
Mechanism & Scope
Key Milestones
& Targets
Progress & Highlights
Biodiesel
(B5)
National Policy
on Biofuels
56
Encourages blending
biodiesel from Used
Cooking Oil (UCO)
and non-edible
oilseeds in diesel;
supports collection
and supply chains.
National target:
5% biodiesel
blending by
2030.
57
Installed capacity ≈
0.8 billion L (2025) vs
demand of 5.5 billion
L for B5. OMCs issued
tenders for 3.7 billion
L procurement
58
. UCO
repurposing initiative
launched in 100+ cities.
Compressed
Bio-Gas
(CBG)
SATAT
(Sustainable
Alternative
Towards
Affordable
Transportation)
Produces CBG from
agri-residues &
municipal waste and
injects into CNG
grids; assures offtake
by Oil Marketing
Companies
(OMCs) and City
Gas Distributions
(CGDs).
Launched in
2018, target:
5,000 plants
by 2030 with
CBG blending
obligation of 5%
in CNG/PNG
from FY 2029.
As on November 2025,
173 CBG plants have
been commissioned
and 285 CBG plants
are at various stages of
construction.
59
Natural Gas
(CNG/LNG)
National
Gas Grid &
Transport
Corridor
Programme
Expands CNG for
urban vehicles and
LNG for long-haul
trucks; acts as a key
fuel before bio- and
H₂-integration.
> Already more
than 9000 CNG
stations are
existing as on
Nov’25 and 50
LNG corridor
stations planned
by 2028.
CNG fleet > 9 million
vehicles with 25–30%
lower CO₂ and 50–80%
lower PM vs diesel
60
.
Pilot LNG freight
corridors operational
on the Golden
Quadrilateral.
61
Green
Hydrogen
National Green
Hydrogen
Mission (2023)
62
Promotes renewable-
powered electrolysis
to produce green
H₂ for transport and
industry; includes
Production Linked
Incentives (PLIs)
and Viability gap
Funding (VGF)
for electrolyser
manufacture and
fuel-cell pilots.
Goal: 5 million
tpa green H
2
by 2030 (i)
Phase I (2023-
26) pilots and
manufacturing (ii)
Phase II (2026-
30) commercial
scale-up.
Phase I allocates ₹19,744
crore support. Five pilot
projects involving 37
hydrogen-fuelled buses
and trucks (15 fuel-cell,
22 H₂-ICE). Green H₂
costs expected to drop to
<USD 2/kg by 2030.
63
Sustainable
Aviation Fuel
(SAF)
National SAF
Initiative aligned
with ICAO
CORSIA
Develops bio-
based jet fuel using
Hydroprocessed
Esters and Fatty
Acids (HEFA),
Alcohol-to-Jet (ATJ)
and Fischer-Tropsch
(FT) routes; promotes
domestic production
and blending
mandates.
Target: 1% SAF
blending by 2027,
2% by 2028, 10%
by 2035.
India’s first SAF plant
produces ≈ 3,200 t/y;
public-sector refineries
preparing to scale to
≈ 32,000 t by 2027.
Lifecycle CO₂ cuts
60–80% vs conventional
jet fuel
64
. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 33
Current Policy Landscape in the Transport Sector
Parallel to fuel decarbonization, India’s electrification drive will eliminate direct emissions
from vehicles through widespread adoption of electric mobility. Policy measures spanning the
FAME and PM E-DRIVE schemes, battery manufacturing PLIs, battery swapping, charging
networks, and railway electrification collectively anchor this transition.
Table 3.3: Key policies and programs to promote electrification in transport sector
Pillar
Key Instrument /
Programme
Mechanism & Focus
Key Milestones &
Targets
Progress & Highlights
National EV
Mission
FAME-I (2015–
19), FAME-II
(2019–24), and
PM E-DRIVE
(2024–26)
National-level
demand incentives
for EVs, and
supports vehicle
subsidies, charging
infrastructure, and
manufacturing
ecosystem
FAME-I (₹895 cr),
FAME-II (₹10,000
cr), PM E-DRIVE
(₹10,900 cr).
Targets: 8–10
million EVs and
50,000 public
chargers under PM
E-DRIVE
65
>1.2 million EVs
deployed under
FAME-II.
GST at 5%, road-tax
waivers in 20+ states
Domestic
Manufactur-
ing
PLI – Advanced
Chemistry Cell
(ACC) Batteries
(₹18,100 cr)
and PLI –
Automotive
Sector (₹25,938
cr)
Incentivises
domestic battery
cell gigafactories
and EV/FCV model
production; linked
to localisation and
export potential
50 GWh battery
capacity by 2030
66
.
India is supporting
50 GWh of ACC
manufacturing
capacity, of which
around 40 GWh has
been awarded so
far, with the balance
under re‑tendering.
Battery
Swapping
Policy
Battery
Swapping Policy
(2022): Battery-
as-a-Service
(BaaS) for
two- and three-
wheelers
Enables battery
standardisation
and pay-per-use
energy model;
reduces upfront
cost by separating
vehicle and battery
ownership
Interoperability
standards by
BIS, 1,000 swap
stations target by
2025
67
India now has
roughly 2,500–
2,600 operational
battery‑swapping
kiosks, with a large
share located in
major metropolitan
regions such as Delhi
NCR, Mumbai, and
Bengaluru.
Charging
Infrastructure
PM E-Drive Public and private
charging network
expansion; grid
integration and tariff
rationalization
75,000 chargers
(2025), 700,000
chargers by 2030
including 10,000
depot chargers
Unified Bharat EV
App launched for
nationwide station
access
68
Public and
Shared
Transport
Electrification
E-Bus and Fleet
Electrification
Schemes
Urban transport
electrification
via concessional
financing, PPP, and
leasing models
50,000 e-buses by
2030 (PM-E Bus
Sewa) and full
electrification of
public fleets in 20
metros by 2030
6,862 electric buses
were sanctioned to
various cities/STUs/
State Govt. entities for
intra-city operations
under the FAME-II
Scheme
69
. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 34
Current Policy Landscape in the Transport Sector
Pillar
Key Instrument /
Programme
Mechanism & Focus
Key Milestones &
Targets
Progress & Highlights
Rail
Transport
Electrification
Mission
Electrification
(MoR)
Electrifies Indian
Railways network;
renewable
integration for
traction
100% broad-gauge
electrification by
2027; Net Zero
Carbon by 2030
More than 90% routes
electrified (62,263
km). Full network
and a Net Zero 2030
vision are in place
Greening the Wheels: Integrating India’s Transport Sector into the
Carbon Market Framework
The Bureau of Energy Efficiency (BEE) under the Ministry of Power is working towards integrating
the transport sector into the India Carbon Market (ICM) to align the sector’s growth trajectory
with India’s climate commitments.
This initiative carries far-reaching implications: it places transport squarely within the purview of
emissions accountability, incentivises decarbonization, and mobilises capital toward sustainable
mobility solutions.
The India Carbon Market (ICM): A Quick Primer
Launched in 2023, the India Carbon Market is a compliance and offset mechanism based trading
scheme designed to promote cost-effective emissions reductions. Entities exceeding defined
emissions thresholds must purchase credits from those who emit less, thereby creating an incentive
structure that rewards low-carbon performance.
Led by BEE and the Ministry of Power, the ICM is being built on strong monitoring, reporting,
and verification (MRV) protocols, with digital registries ensuring transparency, credibility, and
trade efficiency.
India v/s global approach: The EU Emission Trading Scheme (ETS) now covers aviation,
maritime, and through the new ETS II—road transport fuels, creating direct price signals that
encourage fleet electrification and cleaner fuels. California’s Cap-and-Trade includes transport
by regulating fuel distributors upstream, complemented by its Low Carbon Fuel Standard that
rewards low-carbon alternatives. China’s national ETS, while still focused on power, is piloting
transport inclusion through credit trading for new-energy vehicles and fuel-efficiency benchmarks.
3.2.3 Infrastructure & Modal Shift Initiatives
Decarbonisation in transport depends not only on cleaner fuels and vehicles but also on how
people and goods move. India’s strategy therefore integrates infrastructure, planning, and
behavioural interventions that make public, shared, and non-motorised transport the preferred Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 35
Current Policy Landscape in the Transport Sector
choice. Policies such as Transit-Oriented Development (TOD), the Smart Cities Mission,
metro expansion, and Dedicated Freight Corridors (DFCs) together reduce congestion, travel
distances, and fuel consumption—delivering both climate and quality-of-life dividends.
Table 3.4: Key policies and initiatives for transport infrastructure planning
Focus Area
Key Policy /
Programme
Objective &
Mechanism
Key Milestones
& Targets
Progress & Highlights
Urban
Integration &
Planning
National
Transit-
Oriented
Development
Policy (2017)
70
Promote compact,
mixed-use,
walkable urban
growth around
metro/ Bus Rapid
Transit (BRT)
corridors; densify
and align land-use
with transport.
All 100 Smart
Cities to
adopt Transit-
Oriented
Development
(TOD)
principles in
Master Plans
by 2030.
States including Delhi
& Maharashtra have
adopted TOD zoning,
higher Floor Area Ratio
(FAR) near stations. Delhi
TOD corridor (Delhi–
Meerut Regional Rapid
Transit System) integrates
housing + transit.
Smart Cities
Mission (2015–
present)
Fund intelligent
transport, public
space upgrades,
and digital mobility
management.
₹ 2 lakh crore
investment
across 100
cities.
50+ cities introduced
pedestrian zones, ITS,
and cycle tracks. Pune
& Chennai implemented
continuous Non-
Motorised Transport
(NMT) corridors with >
120 km cycle lanes.
Mass Transit
Expansion
Metro Rail
Policy (2017)
& State Metro
Projects
Expand urban
rail to reduce
congestion &
emissions.
50:50 Centre-
State funding;
> 1,000 km
network target
by 2030.
15+ cities operate metros.
Delhi Metro (4.6 M daily
riders, 2023) keeps over
500,000 vehicles off
Delhi’s roads and saves
around 255,000 tonnes of
fuel annually, and was the
world’s first metro system
to earn carbon credits.
71
Urban Bus
Modernisation
& e-Bus
Initiatives
Upgrade city buses
(air-conditioned,
digital ticketing,
women drivers,
e-buses via
FAME).
50,000 e-buses
by 2030 (PM-
eBus Sewa).
Bhubaneswar “Mo Bus”
fleet raised ridership
200% (2018–22); 57%
shifted from private
vehicles. Linked “Mo
e-Ride” e-rickshaw
feeders.
72, 73 Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 36
Current Policy Landscape in the Transport Sector
Focus Area
Key Policy /
Programme
Objective &
Mechanism
Key Milestones
& Targets
Progress & Highlights
Freight &
Logistics Shift
Dedicated
Freight
Corridors
(Eastern &
Western) +
National Rail
Plan 2030
74
Shift freight
from road to rail;
upgrade speeds &
efficiency.
3,300 km
DFC network,
rail freight
share to rise
from 27% →
45% by 2030.
95% track completion
(2025); electrified
corridors cut diesel use
and truck traffic; rail CO₂
intensity –40%.
Maritime India
Vision 2030
& Coastal
Shipping Bill
2025
Promote coastal
shipping, inland
waterways & green
port operations.
Coastal freight
share to reach
10% by 2030;
all major
ports to use
RE power by
2030.
Green Port Guidelines
(Harit Sagar) adopted;
80% major ports running
on renewables; pilot ships
using green ammonia &
methanol.
75
Aviation
Greening
National Civil
Aviation Policy
(2016) &
Green Airports
Programme
76
Improve aviation
efficiency & enable
bio-jet fuel use.
100% RE
power for
airports by
2030; SAF
blending
roadmap
aligned to
CORSIA.
> 80 airports powered by
renewables; bio-jet trials
underway with Indian
Airlines; green-airport
certifications rising.
Non-
Motorised
Transport
(NMT)
Cycle4Change
&
Streets4People
Challenges
under Smart
Cities Mission
Prioritise cycling
and walking
through incentives
and infrastructure.
100 cities
to create
safe NMT
corridors by
2027.
Pune, Bengaluru, New
Town Kolkata launched
bike-share systems and
protected cycle tracks;
pedestrian redesigns
reduce accidents &
emissions.
3.3 Behavioural Nudges for Sustainable Mobility
Technological and infrastructural advances can only go so far. To achieve sustained
decarbonization, human behaviour must shift toward cleaner transport choices. Behavioural
nudges use subtle psychological cues, social norms, and design principles to make low-carbon
mobility the “default” or more appealing option, without restricting freedom or imposing costs.
These interventions, rooted in behavioural economics and the EAST (Easy, Attractive, Social,
Timely) framework, complement hard policies by addressing the cognitive and social barriers
that keep people dependent on private vehicles. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 37
Current Policy Landscape in the Transport Sector
Table 3.5: Behavioural nudges and interventions for promoting sustainable mobility choices
Type of Nudge
Mechanism /
Intervention
Objective &
Approach
Key Examples & Global/
Indian Applications
Urban Design
Nudges
Modify
physical
environment
to prompt
sustainable
behaviour
subconsciously.
Influence
travel choices
and safety
through visual
or experiential
cues.
Piano Stairs (Stockholm): turned stairs
into playable keys, increasing stair use by
66%.
3D Crosswalks (India): optical illusion to
slow drivers, enhancing pedestrian safety.
Color-coded cycle lanes in Pune and
Bengaluru improve visibility and cycling
rates.
77
Information &
Social Nudges
Use real-time
data, peer
comparisons,
or social proof
to encourage
modal shift.
Reduce
uncertainty and
leverage norms
for public/
active travel.
Bus arrival displays & journey apps
(London, Singapore, Indian cities)
reduce perceived wait time and improve
reliability.
“If you took public transport this month,
you’d save ₹X & Y kg CO₂” stickers on
parking meters.
Neighborhood cycling norm campaigns –
highlight “30% of your peers already bike
to work.”
Soft Incentive
Nudges
(Gamification)
Reward
systems,
recognition,
or gamified
challenges.
Make
sustainable
behaviour
rewarding and
fun.
Singapore’s off-peak travel reward app:
commuters earn points redeemable for
vouchers.
78
“Walk/Bike to Work” challenges (India,
EU).
“Green Wave” cycling lights
(Copenhagen): continuous greens for
cyclists maintaining 20 km/h.
Default
& Choice
Architecture
Design defaults
that favor
sustainable
options while
preserving
choice.
Overcome
inertia by
making eco-
friendly
options the
“path of least
resistance.”
Corporate travel defaults: “Train first,
flight by exception.”
Opt-out carpool programs: employees
automatically enrolled unless they decline.
Automatic bus pass renewal systems in
city metros (e.g., Bengaluru). Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 38
Current Policy Landscape in the Transport Sector
Type of Nudge
Mechanism /
Intervention
Objective &
Approach
Key Examples & Global/
Indian Applications
Social Identity
& Visibility
Nudges
Promote pro-
environmental
identity
through public
cues.
Create pride,
visibility,
and peer
recognition
for sustainable
choices.
Green number plates for EVs (India) –
enhance social visibility, spark curiosity
(“green plate effect”).
Thank-you billboards (“You helped reduce
Delhi’s pollution by taking the metro”).
Public
Campaigns
& Experience
Nudges
Temporary
experiential
shifts to expose
citizens to
alternatives.
Allow people
to “try” car-
free mobility
and experience
benefits.
Raahgiri Day (Gurgaon) – weekly car-free
day encouraging walking and cycling.
Car-Free Sundays (Pune, Hyderabad)
supported by NGOs and city authorities.
While these behavioural initiatives demonstrate that India is beginning to integrate soft power
approaches into its transport strategy, they remain limited in scale and reach. To realise their
full potential, behavioural insights must be mainstreamed across programmes such as Smart
Cities, AMRUT 2.0 (Atal Mission for Rejuvination and Urban Transformation), and future
mobility campaigns.
As India advances towards Net Zero Transport, the next frontier is not just cleaner vehicles
or fuels, but smarter, human-centred mobility behaviour where everyday choices collectively
drive a major emissions shift. 4
PATHWAYS TO
2070: MODELLING
TRANSPORT DEMAND
& ENERGY USE 40Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport
4
Pathways to 2070:
Modelling Transport
Demand & Energy Use
This chapter presents the modelling outcomes that explore how India’s transport sector may
evolve under two scenarios: the Current Policy Scenario (CPS) and a Net Zero Scenario (NZS)
aligned with India’s 2070 climate commitment. The results trace changes in passenger and
freight demand, modal shares, energy use, and fuel mix trajectories through 2070, while also
examining the investment requirements needed to enable this transition.
4.1 Modelling Approaches and Methodology
The analytical models used to project transport sector demand and evaluate energy consumption,
emissions, and potential mitigation strategies in this study broadly fall into three categories:
Top-Down, Bottom-Up, and Integrated Models.
Top-down models rely on aggregate data, macroeconomic indicators, and historical trends to
estimate transport sector demand and emissions. Bottom-up models build projections based
on detailed, disaggregated data, including vehicle stock, travel behaviour, trip distances,
technology adoption, fuel efficiency, and vehicle lifetime. The study uses ASIF Framework
(Activity, Structure, Intensity, and Fuel) which falls under the category of bottom-up models.
Integrated Models, as the name suggests, aim to combine the strengths of top-down and
bottom-up approaches to provide a more holistic view.
i. Top-Down Models: Top-down models rely on aggregate data, macroeconomic
indicators, and historical trends to estimate transport sector demand and emissions.
These models such as Computational General Equilibrium (CGE) Models and System
Dynamics Models are valuable for capturing economy-wide interactions and policy
feedback loops. However, they often lack the granularity needed to assess sector-
specific policies or detailed technological transitions within the transport sector.
ii. Bottom-Up Models: Bottom-up models build projections based on detailed,
disaggregated data, including vehicle stock, travel behaviour, trip distances, technology Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 41
Pathways to 2070: Modelling Transport Demand & Energy Use
adoption, fuel efficiency, and vehicle lifetime. Models in this category such as the
ASIF Framework (Activity, Structure, Intensity, and Fuel), Vehicle Stock Models, and
Fleet-Based Energy Models are particularly useful for evaluating technology shifts,
efficiency improvements, and the impact of transport-specific policies. However,
they tend to overlook broader economic interactions and feedback mechanisms.
iii. Integrated Models: Integrated models aim to combine the strengths of both top-
down and bottom-up approaches to provide a more holistic view of the transport
sector. Examples include TIMES-MARKAL (a family of Energy System Optimisation
Models), MESSAGE-ix, and LEAP (Low Emissions Analysis Platform). These
models enable comprehensive assessments of technology pathways, policy impacts,
and cross-sectoral linkages. Additionally, Network-Based Demand Models represent
another important category that estimates travel demand at a high spatial and temporal
resolution, effectively capturing regional variations in travel behaviour. See below
boxes for description of global transport sector models and Indian transport sector
models.
Various global transport sector models/methodologies
Global Change Analysis Model (GCAM) is a global, multi-sectoral model that
integrates energy, economy, land use, and climate systems. It includes a detailed
transport module that models energy demand, fuel mix, and emissions trajectories
(Developed by PNNL).
Low Emissions Analysis Platform (LEAP) is a hybrid tool, integrating both top-down
and bottom-up approaches, and is used for modelling fuel consumption, emissions
trajectories, and the impact of different transport policies on national decarbonisation
goals (Developed by Stockholm Environment Institute).
IEA Mobility Model (MoMo) is a stock-based scenario planning model leverages
ASIF framework to analyze global transport trends, vehicle fleets, fuel consumption,
and emissions (Developed by IEA).
PRIMES-TREMOVE is a detailed transport simulation model under the broader suite
of energy system optimisation tools used in the EU for policy impact assessments on
emissions, fuel use, and mobility trends (Developed by E3Mlab).
Roadmap model is a bottom-up model based on ASIF framework with inputs derived
from IEA MoMo and is used for understanding the impact of various policies and
technological advancements on the future of transportation (Developed by International
Council on Clean Transportation).
Policy Ambition and Sustainable Transport Assessment (PASTA) is a bottom-up
model integrating spatial factor and considers analyses how transport demand is met,
considering mode choices and emissions (Developed by International Transport Forum). Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 42
Pathways to 2070: Modelling Transport Demand & Energy Use
Various Indian transport sector models/methodologies
Indian Energy Security Scenarios (IESS) 2047 is a scenario building bottom-up based
tool with capability to understand the impact of adoption of various technology choices,
fuel consumption, emissions and transport policies (Developed by NITI Aayog).
GCAM-India model is a customised Indian version of global GCAM with transport
demand driven by GDP, Population, modal choices and fuel prices (Customised by
CEEW)
TptM is a bottom-up based tool leverages ASIF framework to project transport demand,
fuel use and GHG emissions (Developed by TERI)
India Multi-Region Times (IMRT) Model is a hybrid model which combines ASIF
framework and TIMES optimisation and uses inputs such as population, investment
trends, and urbanisation rates to project transport demand (Developed by CSTEP)
Activity Analysis Module (AAM) is a multi-sectoral and top-down dynamic optimisation
based model leverages Social Accounting Matrix (SAM) based on National Sample
Survey (NSS) data to project transport demand, fuel demand and emissions (Developed
by IRADe)
India Emission Model (IEM) is a bottom-up fleet stock assessment based model
estimates annual emissions of pollutants from India’s on-road vehicles and costs of
cleaner technologies (Developed by ICCT)
4.1.1 Methodology for Final Energy Demand Estimation of Transport
Sector
For this study, NITI Aayog adopted a modified bottom-up ASIF structure to project the
transport demand and emissions (Figure 4.1). Emissions are product of:
i. Transport sector activity measured in passenger-km or tonne-km
ii. Modal structure of the overall transport
iii. Vehicle categorisation (2W, 3W, 4W etc) further categorised into fuel technology
such as EVs, Petrol, Diesel, etc. and corresponding fuel intensity of each vehicular
category
iv. Mileage for each fuel technology and vehicle category for estimating final energy
demand
v. Emission factor for each fuel Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 43
Pathways to 2070: Modelling Transport Demand & Energy Use
This modified ASIF structure was first adopted in the India Energy Security Scenarios (IESS),
a scenario building bottom-up based tool developed by NITI Aayog. The model is capable
of understanding the impact of modal shift, fuel technology choices, emissions, and transport
policies.
4.1.2 Passenger and Freight Transport Modelling Approaches
The modelling of India’s transport sector adopts a structured approach that differentiates
between passenger and freight demand across major modes. Passenger transport is analysed
under four categories, road, rail, air and metro, while water-based passenger mobility is
excluded due to its negligible share and limited data. Road passenger travel is further divided
into public and private modes, with detailed classifications by vehicle type (buses, cars, two-
and three-wheelers, taxis, omni-buses) and fuel type (diesel, petrol, CNG/LNG, EVs, fuel-cell
vehicles, and flex-fuel options). Rail accounts for both diesel and electric locomotives, with
urban metro and rapid rail systems modelled separately, and aviation focuses on the transition
from conventional turbine fuel to sustainable aviation fuels (SAF).
Freight transport is modelled across five segments, road, rail, air, pipeline, and water. Road
freight is further divided by payload capacity (below 3.5 tonnes, 3.5-12 tonnes, and above 12
tonnes) and by fuel choice (diesel, LNG, CNG, electricity, hydrogen fuel cells). Rail freight
evaluates diesel and electric traction, while water transport considers emerging alternatives
such as green ammonia and green methanol alongside conventional fuels. Aviation freight
explores the potential shift from ATF to SAF.
This comprehensive modelling framework adopted in TIMES (The Integrated Markal EFOM
System) and IESS enables the development of transport sector pathways through 2070
Total Transport
Demand (pkms)
Modal Share
Road Transport
Metro Transport
Rail Transport
Air Transport
Passen ger: Public/
Private share
Fuel Share, efficiency and emission factors
Technology
penetration,
Energy
Consumption,
and Emissions
in each
category of
Transport Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 44
Pathways to 2070: Modelling Transport Demand & Energy Use
Total Transport
Demand (tkms)
Modal Share
Road Transport
Rail Transport
Air Transport
Water Transport
Pipelines Transport
Freight: HCV/
MCV/LCV Share
Fuel Share, efficiency and emission factors
Technology
penetration,
Energy
Consumption,
and Emissions
in each
category of
Transport
Figure 4.1: Methodology representation for transport energy and emission estimation
(a) passenger and (b) freight
4.1.3 Scenarios Compared
The analyses of transport sector demand, fuel consumption, and emissions is undertaken
through two scenarios: Current Policy Scenario (CPS) and Net Zero Scenario (NZS). CPS
primarily reflects the historical growth rate of various inputs in the model such as modal choice,
fuel efficiency improvement, technology penetration (EVs, CNGs, hybrids, hydrogen fuel
vehicles, etc.). This scenario reflects the policies being implemented as of 2023. NZS reflects
the ambitious choices and efforts needed to the same inputs (such as modal choice, technology
penetration, fuel efficiency, etc.) so that the net emissions at economy level reach zero by
2070. The scenario also incorporated the policies already announced. Various assumptions
across input parameters are discussed below, and summary is provided in Table 4.1 below:
Table 4.1: Summary of key indicators in Current Policy Scenario and Net Zero Scenario till 2050 and 2070
Indicator 2023
Current Policy ScenarioNet Zero Scenario
2050 2070 2050 2070
Passenger Kilometres per capita3950 12200 14000 11000 12000
Tonne Kilometres per capita 2920 8200 10000 6500 8000
Urbanisation37% 51% 65% 51% 65%
Modal Share
Passenger
Road 78% 73% 70% 69% 64%
Metro <1% 2% 2% 2% 3%
Rail 17% 19% 20% 22% 25%
Air 4% 7% 8% 7% 8% Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 45
Pathways to 2070: Modelling Transport Demand & Energy Use
Indicator 2023
Current Policy ScenarioNet Zero Scenario
2050 2070 2050 2070
Freight
Road 66% 67% 65% 63% 60%
Rail 22% 24% 25% 27% 30%
Air <1% <1% <1% <1% <1%
Waterways 8% 7% 7% 8% 8%
Pipelines 3.6% 2% 2% 2% 2%
Road Transport
Public
Share (Taxi,
3-W)
47% 49% 50% 54% 60%
Transport Demand (BPKMS/ BTKMS)
The saturation value for Passenger Kilometres (PKMs) per capita is selected to lie between
the levels observed in European economies (around 12,000–15,000 PKM per capita) and
the United States (~20,000 PKM per capita). The higher saturation in the US is attributable
to greater private vehicle ownership and longer average travel distances due to the vast
geographical spread of the country.
In case of passenger, the per-capita saturation level is chosen to be 12,000 km in Net Zero
Scenario (NZS) lower than the Current Policy Scenario (CPS) at 14,000 km. Similarly, in case
of freight, the per-capita saturation level is chosen to be 8,000 Tonnes Kilometres (TKMs) in
NZS lower than the CPS pathway of 10,000 TKMs. This reflects the anticipated adoption of
active planning strategies such as Transit-Oriented Development (TOD), which would reduce
overall transport demand and limit per capita mobility needs despite higher GDP per capita.
Modal Choices
Passenger
Rail: The historical trend registers a declining share of rail in passenger mobility. However,
the rail share is expected to improve due to significant infrastructural investments by Indian
Railways, with rail track length projected to double by 2047.
Rail transport is not only more economical but also easier to decarbonise, making it an important
mode of transport to be promoted for sustainable mobility. According to the National Rail
Plan, passenger demand is expected to rise from 6.9 billion passengers in 2024 to 19.2 billion
passengers by 2051. With average lead distance improving from 150 km in 2024 to 300 km
by 2050s, the proposed rail plan target is assumed to be achieved in Net Zero Scenario (NZS)
which envisages high rail share. The share of rail in passenger transport is assumed to increase
from 17% in 2025 to 20% in Current Policy Scenario (CPS) and 25% in Net Zero Scenario
(NZS) by 2070, reflecting a stronger policy and investment focus on rail as a cost-effective
and low-carbon mode of transport. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 46
Pathways to 2070: Modelling Transport Demand & Energy Use
Metro: India’s metro length grew at a rate of 80 km per year from 600 km in 2020 to 1,000
km by 2025. In-line to this, Current Policy Scenario (CPS) assumes growth of metro length
as 120 km per year. The Net Zero Scenario (NZS) assumes a higher growth rate of 180 km
i
per year, reaching almost 5,000 km by 2047.
Air: According to data by the Directorate General of Civil Aviation (DGCA), passenger kms
have grown at an average annual rate of 9.6% on domestic routes, and at 6.7% on international
routes between 2014 and 2024. In terms of passenger numbers, domestic travel has increased
at 9.7% annually, and international travel at 6.5%.
Looking ahead, it is assumed that aviation passenger traffic can sustain a 8% growth rate
in passenger kms, driven by India’s aspirations to become a developed economy and the
consequent rise in per-capita incomes. As a result, the modal share of air travel is projected
to increase from 4% in 2025 to around 8% by 2070 in both scenarios.
Freight
Rail: Key initiatives by the Government of India in this area, such as the development
of Dedicated Freight Corridors (DFCs), improvements in average freight train speeds,
modernisation of terminals, and reductions in rail tariffs are expected to make rail a more
competitive and reliable freight option.
Driven by these improvements, the share of rail in freight transport is projected to go from
22% in 2025 to 25% by 2070 under Current Policy Scenario (CPS). Under Net Zero Scenario
(NZS), rail’s share is expected to reach 30% by 2070, reflecting deeper policy support, higher
efficiency gains, and the inherent energy and carbon advantages of rail for long-haul freight.
In terms of absolute freight tonnage, Current Policy Scenario (CPS) and Net Zero Scenario
(NZS) projections estimate 4.7- 5.2 billion tonnes (BT) being carried by rail by 2051. This
aligns more closely with Scenario 4 of the National Rail Plan, which envisages around 4.8 BT
of rail freight movement under a modified Business-As-Usual scenario with reduced tariffs.
However, these projections are slightly below the optimistic scenarios of the National Rail
Plan, which estimates 6.1-6.8 BT by 2051, achievable only with more aggressive interventions
such as faster rail speeds, further tariff rationalization, and extensive DFC integration with
multimodal logistics networks.
Thus, while Current Policy Scenario (CPS) and Net Zero Scenario (NZS) reflect a moderate
but realistic growth trajectory, there remains potential for higher rail freight volumes if India
adopts the most ambitious measures outlined in the National Rail Plan, positioning rail as the
low-carbon backbone of the freight sector.
i This is not an improbable assumption of growth given that China added 748 km in 2024. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 47
Pathways to 2070: Modelling Transport Demand & Energy Use
Water: The Maritime Amrit Kaal Vision 2047, set by the Ministry of Ports, Shipping &
Waterways, explicitly targets quadrupling of port capacity from about 2,700 Million Metric
Tonnes Per Annum (MMTPA) in 2024 to over 10,000 MMTPA by 2047, and expansion of
cargo handling capacity from approximately 109 MMTPA to 500 MMTPA by the same year.
Aligned with these capacity goals, the overall movement of goods via water transport,
measured in billion tonne‑kilometres (BTKM), is expected to mirror this trajectory, effectively
quadrupling by 2047 alongside port and cargo growth. In both Current Policy Scenario (CPS)
Net Zero Scenario (NZS), the share achieved in 2047 is expected to stabilise by 2070.
Pipelines: The projections are based on volume and average distance travelled by various
commodities i.e. gas, LPG, crude oil, and other petroleum products. Due to higher share of
fossil commodities in Current Policy Scenario (CPS) , pipeline movement (in terms of ton-km)
is expected to double by 2070. In the Net Zero Scenario (NZS), overall pipeline throughput
is roughly at today’s level, as sector progressively shifts from fossil fuels toward electricity
and low‑carbon fuels.
Share of public & private transport within road mode
Current Policy Scenario (CPS) assumes that the share of public private transport in BPKMs
will continue to be tilted towards private vehicles, with the share declining only marginally
from 53% to 50%. The Net Zero Scenario (NZS), though, envisages this share to drop to 40%.
Technology penetration
Within passenger/freight road segment, EV emerges as dominant choice for decarbonisation
across various vehicle segments. Reflecting the historical growth and upfront cost of EVs,
Current Policy Scenario (CPS) assumes delayed electrification. The Net Zero Scenario (NZS),
however, assumes early electrification with supportive policies and finance. As the study
projects long into future (2070), it has to account for difference in pace of electrification.
These two scenarios also assume greater adoption of CNG in passenger segment and LNG in
freight segment till 2047. However, under Net Zero Scenario (NZS), share of CNG declines
and is replaced by Compressed Bio-Gas (CBG) after 2047, driven by need to reduce total
emissions. The NZS also assumes a greater share for hydrogen fuel cell vehicles among
Heavy Commercial Vehicles (HCVs), with important role of flex-vehicles, strong-hybrids,
CBG vehicles with a greater thrust on biofuels by the government.
In the aviation sector, under Net Zero Scenario (NZS), the international operations are set
to achieve 1% Sustainable Aviation Fuel (SAF) blending by 2027, 2% by 2028, and 5% by
2030, with a continued increase to 50% by 2050 and 70% by 2070. Domestically, the blend
is expected to rise from 2% in 2030 to 50% by 2070. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 48
Pathways to 2070: Modelling Transport Demand & Energy Use
In the shipping sector, under Net Zero Scenario (NZS), low-carbon or green methanol blending
in the existing fleet is targeted to start at 1.5% in 2030 and reach 50% by 2070, while low-
carbon or green ammonia is set to begin at 1% in 2035 and reach 50% by 2070.
Base year
The analysis adopts 2023 as the base year, with all available empirical data calibrated and
validated against this reference year. Forward-looking projections are undertaken for the period
post-2023 through 2070, with the modelling horizon commencing in 2025 and results captured
at five-year intervals. 2020 is used as a reference year for presenting historical data to ensure
consistency of results and alignment with reported emissions.
The first projection year is 2025, and accordingly, model outputs are presented from 2025
onward. Results for 2050 are included to assess progress toward development goals and 2070
results represent the long-term Net Zero outcome.
Modelling Limitations
The findings presented in this report have emerged from a scenario-driven, economy-wide
energy climate modelling framework that develops pathways across sectors towards India’s
Net Zero ambitions. Like all long-term models, these findings rest on key assumptions and
methodological limitations, outlined below for proper interpretation:
i. Deterministic Approach for Key Drivers: The model adopts a deterministic framework,
relying on specific projections for GDP growth, population trends, fuel prices and
technology costs. This limits its flexibility to alternative scenarios, such as economic
shocks or rapid cost declines in EVs.
ii. Simplified Demand Methodology: Demand projections link transport activity directly to
GDP and overlook behavioural nudges such as policy incentives or cultural shifts, which
can drive disproportionate growth in sectors such as Electric 2Ws or shared mobility.
This may lead to under- or overestimation of modal shifts.
iii. Exclusion of Inland Water Passenger Travel: Inland water transport, though, offers
efficient, low-carbon potential for future passenger mobility, limited granular data on
ridership, infrastructure, and emissions limit its inclusion in the model.
iv. Limited Technology Options for Aviation: Beyond SAF blending, the model does not
account for potential technological breakthroughs in aviation, such as hydrogen propulsion
or advanced battery-electric short-haul flights.
v. Biofuel Feedstock and Supply Chain Gaps: While biofuel blending is incorporated Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 49
Pathways to 2070: Modelling Transport Demand & Energy Use
in the form of ethanol, biodiesel, SAF, and CBG, the detailed assessment of feedstock
availability, land-use competition, and supply chain logistics is out of the scope of this
study. This may introduce uncertainty in scalable biofuel deployment for the road and
aviation sector.
vi. Overlooking Regional Demand Variations: The model develops national-level
projections, disregarding regional disparities in population density, income levels,
urbanisation rates, and rural-urban divides, which could skew infrastructure needs and
policy recommendations.
vii. Exclusion of Infrastructure investment costs: The estimated investment cost includes
vehicle costs in-terms of cost to the automobile industry, and cost of batteries and EV
charging infrastructures. The cost of infrastructure for road/rail expansion, aviation,
metros, LNG facilities, and hydrogen filling stations is not included in the model,
understating total sectoral capital needs.
Future Enhancements
Future enhancements to this study would be the integration of multiple scenarios of GDP, fuel
prices and technology costs. Inclusion of behavioural nudges in the transport sector would
enable realistic modal shift analysis. Further, there will be linking this model with the supply
chain and land use availability for biofuel potential to resolve the scalability gaps. Inland water
passenger mobility can also be integrated via detailed ridership assessment.
4.2 Activity Projections and Baseline Estimation
4.2.1 Activity Demand (BPKM/BTKM) Methodology Projections
The study adopts the widely accepted methodology of projecting transport demand through
Billion Passenger Kilometres (BPKMs) and Billion Tonne Kilometres (BTKMs). Globally,
the relationship between GDP per capita and per capita mobility (passenger-km per capita)
has been widely observed and analysed by various think tanks, international agencies, and
academic studies. It generally find that as per capita income rises, personal and public mobility
also increases, and that it saturates after a certain level. This is corroborated by global evidence,
seen in Figure 4.2. The projection of transport demand (passenger and freight) is based on
saturation curve model. The model is specified as:
( )
o
S GDP
LN LN * a b
S - S Capita
=+
Where, S is the per capita transport demand and So is the saturation limit considered, and “a”
and “b” are coefficients derived based on historical data. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 50
Pathways to 2070: Modelling Transport Demand & Energy Use
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
Australia Germany Japan United Kingdom India
Passenger Kilo-metres (PKMs) per Capita
Figure 4.2: Historical growth in per capita passenger transport demand (road + rail) in various
countries showing growth followed by saturation
Source: World Bank, ITF
4.2.2 Estimation of Baseline Transport Demand
The Billion Passenger Kilometres (BPKMs) and Billion Tonne Kilometres (BTKMs) data
for rail and air transport is taken from Indian Railways and DGCA. In case of the remaining
categories of roads, metro, pipeline and water transport, the working group deliberated using
the data available across various ministries/departments/agencies before finally using the
available data with assumptions to estimate BPKMs/BTKMs.
The detailed assumptions for estimation are:
Road transport: MoRTH publishes the data on registered vehicles in its annual
reports. The number of registered passenger vehicles is converted into BPKMs using
assumptions of average occupancy of each vehicle (no. of passengers) and annual
utilisation (no. of kms travelled by each vehicle). For freight, the number of registered
vehicles is converted into BTKMs using assumptions of average payload of each
vehicle (quantity of tonnage carried) and annual utilisation (no. of kms travelled of
each vehicle. The detailed assumptions are tabulated in Annexure A.
Metro transport: Daily ridership data is available for operational Metros from
respective metros reports or through literature review. This data, along with average
km travelled, is used to estimate Metro BPKMs.
Water transport: BTKM is calculated for historical years based on fuel consumption
data published by the Directorate General of Shipping. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 51
Pathways to 2070: Modelling Transport Demand & Energy Use
Pipelines: BTKM is estimated based on the discussions with PNGRB, fuel
transported, and average energy consumption.
Using the above assessment, passenger demand is estimated at 6,410 BPKM and freight
demand at 4,661 in BTKM in 2025. As such estimates are not readily available in the public
domain in a consolidated form, this study contributes by establishing a baseline for passenger
and freight transport demand and modal distribution in India. The likely modal split across
various categories is shown in the Figure 4.3 below.
Air, 3, 0%
Rail, 1027,
22%
Pipeline,
170, 4%
Freight Transport Modal Share
in 2025 (btkms)
Road, 3095,
66%
Water, 367,
8%
Air, 258,
4%
Rail, 1088,
17%
Road, 4998,
78%
Passenger Transport Modal Share
in 2025 (bpkms)
Metro, 66,
1%
Figure 4.3: Baseline passenger transport (BPKM) and freight transport (BTKM) demand estimation (2025).
4.3 Results and Discussion
The following results section provides projections for transport energy demand and fuel mix. The
projections are derived using a saturation growth curve model with GDP as a key input parameter.
The analysis is structured into passenger transport and freight transport, providing insights into
mode-wise demand, technology adoption, and associated energy and emission implications.
4.3.1 Passenger Transport: Demand and Modal Shift
BPKMs projections
This study projects India’s passenger transport demand for both Current Policy and Net Zero
scenarios. A global comparison of GDP per capita and PKM per capita (as discussed in figure 4.4)
shows that as economies develop, travel demand rises significantly before it eventually saturates.
In India’s Current Policy Scenario (CPS), the per capita Passenger Kilometres (PKM) is projected
to grow from 4,542 in 2025 to about 14,000 PKM/capita by 2070, reflecting rising incomes,
enhanced mobility infrastructure, and continued urbanization. However, the Net Zero Scenario
(NZS) expects PKM/capita to saturate at around 12,000 by 2070. This reduction is attributed to Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 52
Pathways to 2070: Modelling Transport Demand & Energy Use
active planning strategies, including Transit-Oriented Development (TOD), promotion of shared
mobility, and a stronger emphasis on Non-Motorised Transport (NMT), which collectively reduce
dependency on private Motorised travel even as GDP per capita rises.
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
20102020203020402050206020702010202020302040205020602070
Passenger Kilometres per Capita
0
4,000
8,000
12,000
16,000
20,000
24,000
Billion Passenger-Kilometres (BPKMS)
Current Policy Scenario Net Zero ScenarioCurrent Policy Scenario Net Zero Scenario
Figure 4.4: Projected growth in billion passenger-kilometres (BPKMS) and per- capita passenger
kilometres (PKMS)
Figure 4.5 provides a useful reference to assess how India’s mobility demand compares globally.
In 2023, India is at the lower end of both GDP per capita and PKM per capita, reflecting limited
personal mobility compared to developed nations. International trends clearly show a positive
correlation between income and mobility, with PKM per capita rising as economies grow, before
gradually saturating.
Australia
France
Germany
Spain
Japan
Italy
United Kingdom
United States
Thailand
Vietnam
India (2023)
0
5,000
10,000
15,000
20,000
25,000
0 10,00020,00030,00040,00050,00060,00070,00080,000
Passenger Kilometres (PKM) per Capita
GDP Per Capita, PPP (constant 2021 Int'l $)
Figure 4.5: Global comparison of GDP/capita vs PKM/capita highlighting that mobility increases
with rising income levels Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 53
Pathways to 2070: Modelling Transport Demand & Energy Use
Both the Current Policy Scenario (CPS) and Net Zero Scenario (NZS) project India to transition
to a high-income quadrant by 2070. The CPS trajectory aligns with higher-mobility European
country such as France and Italy, while the NZS projects similar income levels, but with
lower transport intensity, indicating a deliberate shift toward more efficient and sustainable
mobility choices. This is consistent with the saturation value for PKM per capita assumed for
India, which lies in the range of 12,000 to 15,000 PKM/capita levels observed in European
economies and the ~20,000 PKM/capita level observed in United States. The latter has a higher
saturation level primarily due to greater private vehicle ownership and longer average travel
distances, driven by its vast geographical spread and car-dependent transport.
India’s future trajectories under Current Policy Scenario (CPS) and Net Zero Scenario (NZS)
illustrate how policy and planning can shape mobility outcomes, ensuring that economic
prosperity does not necessarily translate into excessive transport intensity. Instead, strategic
measures such as Transit-Oriented Development (TOD), shared mobility, and Non-Motorised
Transport can enable equivalent or better accessibility with lower per-capita travel demand,
supporting sustainability without constraining economic growth.
Modal shift
India’s passenger transport landscape is projected to undergo a gradual modal shift away from
road-based travel. Road transport, which had with a 78% share in 2025, is expected to decline
to 70% under the Current Policy Scenario (CPS) and to 64% under Net Zero Scenario (NZS)
pathway as other modes of transport gain ground (Figure 4.6).
Rail: After decades of declining modal share, rail is projected to recover slightly, supported
by doubling of India’s rail track length by 2047 and service efficiency improvements.
Under the CPS, rail’s share increases modestly from 17% in 2025 to 20% by 2070
In the NZS pathway, greater policy push and investment take the share of rail
transport to 25% by 2070, offering a cost-effective and lower-emission backbone
for medium- and long-distance travel. This is also in line with National Rail Plan
projections where passenger demand rises from 6.9 billion in 2024 to 19.2 billion
by 2051.
This shift also assumes an increase in average passenger lead distance from 150 km
in 2024 to ~300 km by 2070, supporting higher utilization.
Urban Metro & Rapid Transit: Urban rail networks expand substantially alongside intercity
rail:
Metro systems grow from ~1,000 km in 2025 to ~3,600 km under Current Policy
Scenario (CPS) and ~5,000 km under and Net Zero Scenario (NZS) by 2047, assuming
~120 km/year (CPS) and ~180 km/year (NZ) of new network additions. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 54
Pathways to 2070: Modelling Transport Demand & Energy Use
Aviation: Under both Current Policy and Net Zero Scenarios, air travel’s modal share increases
from 4% in 2025 to ~7% by 2047 before stabilizing. However, absolute demand continues
to grow rapidly with rising incomes, mirroring patterns in upper-middle-income countries
like China and Brazil. Managing emissions will require parallel decarbonisation measures,
including SAF adoption and airport electrification.
What this means:
Current Policy Scenario (CPS) sees incremental modal rebalancing, while Net Zero
Scenario (NZS) accelerates structural change by strengthening rail and metro systems.
International precedents (Japan, Europe) support the feasibility of maintaining higher rail
and metro shares, reinforcing this pathway for India.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2020 202520502070
Modal Share: Passenger Transport
Road Rail Air Metro
CPS NZS CPS NZS
Figure 4.6: Modal shift projections of passenger transport under Current Policy Scenario (CPS)
and Net Zero Scenario (NZS)
Passenger Transport: Public vs Private and Vehicle Ownership
Public- Private Mix within Road Transport
India’s road transport mix is also expected to markedly shift toward public modes. Private
vehicles, comprising two-wheelers and cars, accounted for 53% of road-based passenger
movement in 2025. The share of public transport is projected to rise to 50% (CPS) and 60%
(NZS) (see Table 4.2), enabled by sustained expansion of public transport such as buses, taxis,
and three-wheelers. Key enablers include the continued rollout of schemes such as the PM-
eBus Sewa, which aims to deploy 10,000 e-buses across 100 cities, and state-led programmes Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 55
Pathways to 2070: Modelling Transport Demand & Energy Use
promoting integrated urban mobility. Investments in digital ticketing, feeder connectivity,
and shared mobility services are also expected to improve convenience and affordability,
encouraging a shift away from private ownership. Globally, similar transitions are seen in
cities like Bogotá and Seoul, where dedicated bus rapid transit (BRT) systems and multimodal
integration have played a catalytic role in reversing private vehicle dependence.
Table 4.2: Modal share–road transport projections under CPS & NZS, 2070
Current (2025)Current Policy Scenario (2070)Net Zero Scenario (2070)
Private Vehicles 53%50%40%
Public47%50%60%
Personal Vehicular Ownership
India’s vehicle ownership is set to rise sharply by 2070, driven by income growth, urbanisation
and rising aspirations. This trend presents challenges for urban transport systems, particularly
with respect to congestion, energy use, and emissions, highlighting the need to better align
mobility growth with sustainable transport modes.
As of 2022, India had 322 million registered vehicles (MoRTH), dominated by two-wheelers
(81.6%), followed by cars (14%). While there is significant growth in passenger vehicle sales
from 16.9 million (2022) to 22.89 million (2024), the share of two-wheeler sales fell from 84%
of the total in 2019 to 78.5% in 2024 (SIAM), indicating a slow shift toward four-wheelers
and shared mobility.
Private vehicle ownership reached 197 (167 two-wheelers and 30 cars) per 1000 person in
2023. By 2070, cars per 1000 are expected to grow from 30 per 1000 person to 250 per 1000
in Current Policy Scenario (CPS) (Table 4.3). In Net Zero Scenario (NZS), the growth is lower,
200 per 1000, because of the focus on public transport. These trajectories are conservatively
specified and remain below levels observed in developed economies (e.g., ~850 per 1,000 in
the US and ~400 in Brazil). This reflects India’s urban density, infrastructure capacity, income
distribution, and a policy orientation toward public transport, shared mobility, and compact
urban development, rather than convergence toward high private car dependence. The effects
of rising vehicle ownership can already be observed in major metropolitan areas. For example,
Bengaluru, with 2.31 million cars and 188 cars per 1,000 people in 2023, experiences persistent
congestion, illustrating the importance of strengthening public transport systems and managing
demand to support more sustainable urban mobility. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 56
Pathways to 2070: Modelling Transport Demand & Energy Use
Table 4.3: Vehicle ownership projections
Personal Vehicle Ownership Projections (per 1000 Population)
2023
NITI Aayog (2050/70)
TERI (2050)
IEA (2050)
Current Policy
Scenario
Net Zerio
Scenario
STEPS
ii
APS
iii
2-Wheeler 167
290 (2050)
270 (2070)
290 (2050)
220 (2070)
300 275 250
4-Wheeler 30
170 (2050)
250 (2070)
130 (2050)
200 (2070)
200 140 100
4.3.2 Freight Transport: Demand and Modal Shift
BTKMs projections
India’s freight transport growth is closely tied to its economic development, with rising incomes and
industrial expansion driving increased demand for movement of goods. In 2025, Tonne Kilometres
(TKM)/Capita stood at 3,300, with total freight transport reaching 4,661 BTKMs. Under Current
Policy Scenario (CPS) , TKM/Capita is projected to increase nearly 3 times to 10,000 by 2070.
In contrast, Net Zero Scenario (NZS) anticipates a slightly lower growth to 8,000 TKM/Capita,
influenced by sustainability-driven policies that promote efficient logistics, rail freight expansion,
electrification, and multimodal transport solutions (See Figure 4.7).
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2010202020302040205020602070
20102020 20302040 205020602070
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Billion Tonne-Kilometres (BTKMS)
Tonne-Kilometres (TKMS) per capita
Current Policy Scenario Net Zero Scenario
Current Policy Scenario Net Zero Scenario
Figure 4.7: Projected growth in freight transport demand under Current Policy Scenario and Net
Zero Scenario till 20270
ii STEPS (Stated Policies Scenario): Reflects the trajectory of the energy system under governments’ existing and explicitly
announced policies and measures.
iii APS (Announced Pledges Scenario): Assumes all announced climate and energy pledges, including long‑term net‑zero
targets, are achieved in full and on time. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 57
Pathways to 2070: Modelling Transport Demand & Energy Use
Global trends show that freight movement generally rises with GDP per capita (Agriculture+
Industry), but the correlation is not uniform (See Figure 4.8) and is influenced by factors
such as geography, economic structure, and transport efficiency in shaping freight demand.
Countries like the US and Australia have high tonne-kilometres per capita due to dispersed
geographies and long-haul freight needs, while European nations have lower freight intensity
despite high GDP, reflecting compact economies and efficient logistics. In Asia, China’s high
TKM per capita relative to its GDP highlights its freight-heavy industrial model.
Australia
France
GermanySpain
Japan
Italy
United Kingdom
United States
Thailand
Vietnam
China
India (2023)
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
0 10,00020,00030,00040,00050,00060,00070,00080,000
TKM per Capita
GDP per Capita, PPP (constant 2021 Int'l $)
Figure 4.8: Global comparison of Freight demand per capita as a function
of Income (GDP per capita)
Modal shift
India’s freight mix will change differently under the Current Policy Scenario (CPS) and Net
Zero Scenario (NZS) pathways, influenced by investments, policies, and decarbonisation
priorities. Road freight remains the main mode in both scenarios but gradually loses share.
Under CPS, road’s share declines slightly from 66.4% in 2025 to 65.4% by 2070, reflecting
a continued reliance on road-centric logistics typical of developing economies. In contrast, in
the NZ scenario, road’s share drops more substantially to 60% by 2070, as rail and waterways
gain a larger share due to sustained policy support and infrastructure expansion (Figure 4.9).
Rail: Rail freight is expected to have a modest but meaningful recovery compared to its
historical decline.
Under Current Policy Scenario (CPS), rail’s share rises from 22% in 2025 to 25%
by 2070, driven by DFCs, higher train speeds, terminal modernization, and tariff
rationalization. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 58
Pathways to 2070: Modelling Transport Demand & Energy Use
Under Net Zero Scenario (NZS), rail share goes up to 30% by 2070, supported by
better efficiency and the inherent energy and carbon advantages of rail for long-haul
logistics.
In absolute tonnage, Current Policy Scenario (CPS) and Net Zero Scenario (NZS) project 4.7-
5.2 BT by 2050, aligning closely with Scenario 4 of the National Rail Plan, which assumes
moderate tariff reductions. However, these remain below the plan’s most ambitious scenarios
(6.1-6.8 BT), which would require even greater interventions like faster train speeds, further
tariff rationalization, and integrated multimodal logistics networks.
National Rail Plan - 2030
The National Rail Plan (NRP) 2030 aims to create a ’future-ready‘ Indian Railway system,
focusing on increasing the freight modal share to 45%, reducing transit times, and building
capacity to meet demand through 2050.
Key strategies include 100% electrification, multi-tracking of congested routes, upgrading speeds
to 160 kmph on Delhi–Howrah/Delhi–Mumbai and 130 kmph on other Golden Quadrilateral/
Golden Diagonal routes, and eliminating all level crossings on these corridors. The plan also
identifies new Dedicated Freight Corridors and High-Speed Rail Corridors, assesses rolling stock
and locomotive requirements, and encourages sustained private sector participation in operations,
terminals, and infrastructure development
Waterways: Maritime Amrit Kaal Vision 2047 targets a fourfold increase in port capacity from
2,700 to 10,000 MMTPA and cargo handling growth from 109 MMTPA to 500 MMTPA by
2047. As a result, freight movement over waterways, is expected to quadruple by 2047 and then
stabilise through 2070. Consequently, waterways’ share stays around 8% in both scenarios.
Pipelines: They evolve differently across scenarios.
Under Current Policy Scenario (CPS), higher reliance on fossil fuels leads to a
doubling of PTKM by 2070, maintaining a ~2% modal share.
Under Net Zero Scenario (NZS), pipeline volumes remain broadly stable but shift
toward low-carbon fuels, while the modal share declines slightly to ~1.5% by 2070
as fossil fuel-based transport reduces.
This means that CPS delivers only incremental modal shifts, leaving road as the dominant
mode and limiting efficiency gains while NZS achieves a more transformative rebalancing,
with rail and waterways playing a much larger role, aligning India’s freight decarbonisation
with global best practices in the EU, China, and Switzerland. Greater alignment with the
most ambitious National Rail Plan scenarios could unlock even higher freight rail potential,
positioning it as the low-carbon backbone of India’s logistics network. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 59
Pathways to 2070: Modelling Transport Demand & Energy Use
Air: Air transport currently plays a limited role in India’s freight movement, accounting
for about 1.82 BTKMs in 2023, or approximately 0.04% of total freight activity. Air freight
is projected to remain a niche mode, accordingly, its share in overall freight transport is
expected to stay well below 1% under both the CPS and NZS through 2070, with growth
in absolute volumes largely constrained to specific cargo segments such as express delivery,
pharmaceuticals, and electronics.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2020 202520502070
Modal Share: Freight Transport
Road Rail Air Water Pipeline
CPS NZS CPS NZS
Figure 4.9: Modal shift projections of freight transport till 2070 under Current Policy Scenario
(CPS) and Net Zero Scenario (NZS) highlighting increase in rail share
Freight Transport: Vehicle Ownership
India had approximately 1.5 crore registered freight vehicles in 2022. Of these 59% had
payload capacity up to 3.5 tonnes, 6% had 3.5-12 tonnes, and 35% above 12 tonnes. According
to SIAM data, about one million new freight vehicles were sold domestically in 2024.
79
Freight vehicles up to 3.5 tonnes, which currently dominate the market, experience the fastest
growth in both scenarios due to rising demand for last-mile delivery and urban logistics. Under
Current Policy Scenario (CPS), they are expected to increase from 7 per 1000 people in 2025
to 30 per 1000 by 2050 and 36 per 1000 by 2070. In the Net Zero Scenario (NZS) pathway,
their growth is expected to reach 40 per 1000 by 2070. Medium freight vehicles (3.5-12 tonnes)
grow more moderately, from 0.7 in 2025 to 6.8 (CPS) and 7.5 (NZS) per 1000 people by
2070, supporting regional and mid-distance logistics. Heavy-duty freight vehicles (above 12
tonnes) grow from 2.4 to 6.4 per 1,000 people (CPS) and 4 per 1000 people (NZS), reflecting
a strategic shift towards rail and low-carbon alternatives for long-haul freight movement in a
sustainable transport future (Table 4.4). Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 60
Pathways to 2070: Modelling Transport Demand & Energy Use
Table 4.4: Freight vehicle ownership projections 2070 (per 1000 population)
Freight Vehicle Ownership Projections 2070 (Per 1000 Population)
Current (2025)
Current Policy
Scenario (2070)
Net Zero Scenario
(2070)
< 3.5 Tonnage73640
3.5–12 Tonnage0.76.87.5
> 12 Tonnage2.46.44
Total10.149.251.5
When compared to global benchmarks, India’s projected freight vehicle density by 2070
remains below today’s U.S. and EU levels. The EU has about 80 commercial vehicles per
1,000 people, while the US has a higher density of ~89 commercial trucks per 1,000 population
(excluding SUVs and pickups).
By contrast, India currently has ~10 commercial vehicles per 1,000 people at last count (2025),
which is among the lowest ownership rates globally. India’s projected 2070 levels of 49 per
1000 under Current Policy Scenario (CPS) and 52 per 1000 under Net Zero Scenario (NZS),
with the marginally higher level under NZS reflecting a greater presence of light commercial
vehicles and service-oriented fleets enabled by improved infrastructure, stronger inter-city
connectivity, and more integrated urban systems.
The Net Zero Scenario emphasises a balanced logistics model, where light and medium-duty
vehicles grow strongly to support urban and regional deliveries, while heavy-duty trucks
remain constrained due to a deliberate modal shift toward rail and waterways for long-haul
freight. This approach mirrors European multimodal logistics systems, which rely less on
heavy trucks despite high overall freight volumes.
4.3.3 Technology Transitions: Electrification, Gas, and Alternative Fuels
Electrification of passenger and freight transport
Global & Domestic EV Landscape: Global EV adoption is uneven, shaped by national
priorities and infrastructure. China leads with 64% of global electric car sales in 2024,
supported by strong mandates and battery manufacturing. The US and Europe are expanding,
with nations like Norway achieving nearly 80% EV sales. India’s EV ecosystem is at a turning
point, enabled by FAME incentives, reduced GST, and cost competitiveness, though future
adoption hinges on sustained policy, infrastructure, and technological push. However, large-
scale adoption still faces challenges such as high upfront cost, sparse charging infrastructure,
limited technological readiness, high import dependency and lacks consumer awareness.
In this background, projections from NITI Aayog’s scenario analysis illustrate the divergent
Current Policy and Net Zero pathways. While adoption of electric mobility technologies Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 61
Pathways to 2070: Modelling Transport Demand & Energy Use
including its derivatives accelerates across all passenger vehicle categories under NZS,
particularly after 2030, the CPS exhibits a more gradual transition. Even with higher
electrification, there remains a significant role for biofuel compatible vehicles, reflecting the
scale of sectoral growth and the diversity of use-cases, alongside and in combination with the
electric options. This contrast underscores the critical role of policy ambition, infrastructure
rollout, and technology investment in shaping India’s transport decarbonisation trajectory.
Table 4.5: xEV Penetration projections on annual sales for passenger & freight vehicles
till 2070 for Current Policy Scenario (CPS) and Net Zero Scenario (NZS)
Current Policy Scenario Net Zero Scenario
2050 2070 2050 2070
2W100% 100% 100% 100%
3W90% 90% 100% 100%
4W-Cars60% 80% 70% 85%
4W-Taxi60% 80% 95% 95%
Bus80% 80% 90% 90%
Vehicles payload upto 3.5 tonnes60% 80% 90% 95%
Vehicles payload from 3.5-12
tonnes
15% 60% 50% 95%
Vehicles payload above 12 tonnes4% 50% 25% 80%
xEV: Electrified vehicles (generic term for all types of electric vehicles i.e., Battery EV, Strong Hybrid EV, Range Extender EV, Plug-in
Hybrid EV). Within the xEV portfolio, Battery EVs represent the dominant technology in terms of market penetration and deployment
in the study, while other technologies are assumed to be of limited penetration.
Key Enablers & Challenges: Scenarios from analysis by think-tanks suggest early dominance
of two- and three-wheeler EVs due to favourable economics. However, hurdles remain in the
form of high upfront cost, urban charging gaps, reliance on coal-based electricity, and critical
mineral supply risks. To ensure a secure and sustainable transition to EVs, investment in public
charging, diversification of battery supply chains, and R&D in alternative chemistries must
be scaled. Energy security is another major concern as a dependence on critical minerals,
especially lithium, cobalt, etc. poses strategic risks. India will need to secure diversified supply
chains, invest in recycling ecosystems, and promote research in alternative chemistries like
sodium-ion or Lithium Iron Phosphate (LFP) batteries to address these risks.
Role of natural gas
The share of CNG/ LNG in India’s transport sector particularly in cars, buses, taxis and
trucks is expected to rise steadily until around 2047, after which it is expected to plateau.
In the medium term, CNG/LNG is being leveraged as it offers lower emissions compared to
traditional petrol and diesel, especially in urban public transport systems and high-mileage
commercial fleets. For India, natural gas plays a vital role in reducing local air pollution and
enhancing energy affordability while providing an immediate decarbonisation pathway during
the ramp-up of electric and hydrogen-based mobility ecosystems. However, post 2047, the Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 62
Pathways to 2070: Modelling Transport Demand & Energy Use
strategic emphasis is expected to shift decisively toward zero-emission technologies, in line
with India’s Net Zero vision. Natural gas share in transport is projected to decline as EVs reach
cost parity, green hydrogen becomes more accessible, and ethanol-powered flex hybrids and
battery-electric models expand across all vehicle classes. It is also important to decarbonise
the grid from the present ~76.8% share coming from fossil origin.
This trajectory mirrors global energy strategies, where natural gas, including Compressed
Natural Gas (CNG) and Liquefied Natural Gas (LNG), is increasingly seen as a clean
alternative. Countries like the United States, Italy, and China have scaled CNG deployment
primarily in urban public transport and freight fleets to reduce particulate emissions and meet
interim climate targets. However, beyond 2040, as battery electric vehicles (BEVs) and fuel
cell technologies mature and infrastructure scales up, the role of natural gas is expected to
taper with scale-up of Compressed Bio-Gas (CBG) re-purposing the existing infrastructure.
Role of Alternate Fuels
Hydrogen fuel cell technology is being considered as an option for heavy-duty mobility
and longer-range applications. Japan and South Korea have spearheaded national hydrogen
strategies, with OEMs like Toyota (Mirai) and Hyundai (Nexo) commercialising fuel cell
passenger vehicles, while also pushing fuel cell buses and trucks for logistics and transit
sectors. Germany is investing in hydrogen corridors and refuelling infrastructure to support
fuel cell deployment in commercial fleets. However, challenges around hydrogen production
costs, infrastructure rollout, and vehicle affordability remain key bottlenecks for mass adoption.
Similarly, flex-fuel hybrid vehicles have been integral to Brazil’s transport decarbonisation
story. With over 85% of light-duty vehicles being flex-fuel compatible, Brazil has successfully
leveraged domestic ethanol production to reduce oil imports and transport-sector emissions.
These hybrids are now being adapted with electrified powertrains, creating a powerful synergy
between biofuels and electrification.
In India, the push toward fuel cell and ethanol-based technologies is gradually strengthening,
driven by a dual imperative, reducing oil imports and ensuring energy diversification, in the
mobility sector. The government has initiated pilot projects on green hydrogen-powered buses,
notably in cities like Delhi and Pune, and is incentivising R&D on fuel cell stacks under the
National Hydrogen Mission. Concurrently, major OEMs, including Toyota and Maruti Suzuki,
are exploring flex-fuel hybrid models tailored to Indian conditions. The Ministry of Road
Transport and Highways (MoRTH) has mandated that vehicles sold in India be compatible
with E20 fuel (20% ethanol blend), while promoting the transition toward E100-ready flex-
fuel engines, which can achieve near-zero lifecycle emissions.
India’s Net Zero Scenario (NZS) envisions the emergence of hydrogen fuel cell vehicles
(HFCVs) and flex-fuel hybrids as complementary solutions to BEVs, especially in segments Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 63
Pathways to 2070: Modelling Transport Demand & Energy Use
where electrification faces technological or infrastructural constraints. By 2070, hydrogen
based buses and heavy commercial trucks are expected to account for up to 5% and 20%
respectively of the overall sales respectively in NZS, offering a low-emission alternative
particularly suitable for long-range and high-utilisation applications, versus limited penetration
in Current Policy Scenario (CPS). Likewise, flex-fuel cars, designed to run on 100% ethanol,
are projected to constitute around 10% of car sales share by 2050 under the NZS and
saturate thereafter
iv
. These vehicles combine internal combustion engines (ICE) optimised
for ethanol, providing both energy flexibility and near-zero lifecycle emissions when powered
by sustainable biofuels.
As battery electrification accelerates, fuel cell and flex-fuel hybrid technologies will serve as
critical enablers of a diversified, resilient, and inclusive clean mobility transition. Together,
they form part of a broader technological portfolio that can deliver on India’s long-term goals
of energy security, industrial competitiveness, and deep decarbonisation in transport. It is also
expected that India’s renewable energy capacity will have enhanced substantially to be able
to decarbonise the grid and offer green power for green hydrogen manufacture in both NZS
and CPS.
4.3.4 Transport Energy Demand
India’s passenger and freight transport sectors consumed total of 137 Mtoe energy in 2025.
It is noteworthy that the average intensity of passenger transport (11.5 toe per million PKM)
and freight transport (14.0 toe per million TKM), aligns with global averages at 12–14 toe
per million PKM and 14–17 toe per million TKM respectively.
As mobility expands, overall transport energy use increases in the medium term and
subsequently moderates toward 2070 as the transport system evolves. In the Current Policy
and Net Zero scenario total final transport energy reaches 335 Mtoe and 250 Mtoe respectively
by 2050, and further declines to 307 Mtoe and 192 Mtoe by 2070. The evolving fuel break-
up underlying these trajectories is also illustrated in Figure 4.10/ Table 4.6 and discussed in
the subsequent section.
Against an almost fourfold increase in passenger and freight demand (BPKMs and BTKMs)
by 2070, transport energy use increases by only about 2.2 times under Current Policy Scenario
(CPS). While under Net Zero Scenario (NZS), even as BPKMs and BTKMs grow by more
than three times, total energy use is moderated to only about 1.4 times in 2070 compared to
2025 level. These trends reflect the efficiency dividend from electrification, modal shift toward
public and rail-based transport, and improved vehicle technologies, as shown in Figure 4.11.
80
iv Beyond 2055, FFVs are assumed to operate on pure ethanol (near 100% ethanol), and CBG vehicles are assumed to
operate on pure Compressed Bio-Gas. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 64
Pathways to 2070: Modelling Transport Demand & Energy Use
0
50
100
150
200
250
300
350
400
CPS NZS CPS NZS
2020 202520502070
Million Tonnes Oil Equivalent (Mtoe)
ATFGasolineDiesel
Fuel OilCNG/LNG/CBG/GH2GH2 Derivatives (Shipping)
Ethanol/Biodiesel/SAF Electricity
Figure 4.10: Transport energy demand under Current Policy Scenario (CPS) and Net Zero
Scenario (NZS) until 2070 in Million Tonnes of Oil Equivalent (Mtoe)
The lower transport energy use in Net Zero Scenario (NZS) is a result of multiple factors;
Transport Demand driven by Transit-Oriented Development (TOD), Modal Shift, share of
public and private vehicles in road transport, fuel efficiency and technology shift. Under
TOD, reductions also come from promoting shared mobility and prioritising Non-Motorised
Transport (NMT), supported by proactive planning strategies that collectively reduce reliance
on private Motorised travel and, consequently, reduction in energy consumption as compared
to Current Policy Scenario.Mil Milon T esOEoquv M Milon TesOEquvsa M Milon TesOE Milon TeslOeE M Milio Mil Million Tonne os Oil Equivalent (Mtoe) M Mi Mii Mil Mii Mil Mii Mil
Figure 4.11: Drivers for lower energy use in Net Zero Scenario (NZS) by 2070 compared to
Current Policy Scenario (CPS) Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 65
Pathways to 2070: Modelling Transport Demand & Energy Use
This transition hinges on the successful implementation of India’s CAFE norms (see Box
below). The progressive extension of fleet-wide CO₂ standards under CAFE III (91.7 g/km)
and IV (70 g/km) provides the regulatory foundation for the efficiency gains. Additional
wedges come from modal shift (20%) as passenger trips and freight tonnes move toward buses/
metro/rail and waterways, while demand moderation (13%), through compact urban form,
telework, pricing, and better land-use, caps vehicle-kilometre growth. Technology shift leads
to 53% reduction, majorly due to electrification, while operational improvements (3%) deliver
additional reductions through eco-driving, higher load factors, and logistics optimisation.
CAFE Norms – Driving Efficiency in the Road to Net Zero
India’s Corporate Average Fuel Efficiency (CAFE) norms represent a critical regulatory tool for
reducing fuel consumption and tailpipe CO₂ emissions in the passenger vehicle segment. Notified
under the Energy Conservation Act and administered by the Bureau of Energy Efficiency (BEE),
CAFE norms set manufacturer-level, sales-weighted average CO₂ emission limits for new passenger
cars sold in India, indexed to the vehicle’s unladen weight. India’s framework includes super-credits
(e.g., counting each EV as multiple vehicles for compliance), and derogation factors for off-cycle
technologies like start-stop systems, regenerative braking, and efficient transmissions. However, these
should be progressively phased out to maintain the integrity of actual emission reductions.
Introduced in 2015, the first cycle (CAFE 1, 2017-22) targeted an average CO₂ emission level
of approximately 130 g/km for average weight of 1037 kg (based on MIDC cycle), which was
tightened to 113 g/km under CAFE II by 2022–23. CAFE norms use a mass-based linear equation
for calculating the corporate average CO₂ target:
Corporate Average Target CO₂ = a + b × (M − Mo)
0
20
40
60
80
100
120
140
2025203020352040204520502055206020652070
CAFE Trajectory on New Sales
(Without Derogation Factor)
Current Policy Scenario Net Zero Scenario
grams CO
2
per kilometre Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 66
Pathways to 2070: Modelling Transport Demand & Energy Use
As per the Net Zero pathways modelling, India’s CAFE trajectories are illustrated in the adjacent
chart, which shows a linear reduction of fleet CO₂ emissions. This pathway implicitly assumes a
sharp increase in the market share of zero-emission vehicles (ZEVs)— reaching 100% ZEV sales
by around 2055 to allow fleet-level emissions to taper to zero by 2070. Beyond 2055, FFVs are
assumed to operate on pure ethanol (near 100% ethanol), and CBG vehicles are assumed to operate
on pure Compressed Bio-Gas. Further, CAFE should incentivise the adoption of light weight,
fuel‑efficient, smaller entry‑level cars as is increasingly the case in leading global markets, while
also accounting for the lifecycle emissions benefits and carbon sequestration potential associated
with sustainable biofuels.
To ensure that CAFE norms remain credible and future-ready, India must adopt a time-bound
plan to sunset the relaxations and shift toward true lifecycle-zero vehicles. Doing so will not only
align with the modelled Net Zero pathway but also prepare the domestic auto industry for global
low-emission export standards.
a = baseline CO₂ coefficient (g/km), b = slope coefficient (g/km/kg), M = sales-weighted average kerb mass of the OEM fleet (kg),
Mo = reference mass (e.g., 1170 kg in the draft CAFE III)
Transport Energy Demand and Fuel Mix
Currently, nearly 93% of energy used in India’s transport sector is from petroleum products
and gas. Under the Current Policy Scenario (CPS), the system remains fossil-heavy: by 2050,
over three-fourth of supply is still fossil, and even by 2070 fossil fuels remain at 64% of the
transport energy mix.
Table 4.6: Projections of fuel demand under Current Policy Scenario and Net Zero Scenario by 2050 & 2070
Fuel Type 2025
20502070
Current Policy
Scenario
Net Zero
Scenario
Current Policy
Scenario
Net Zero
Scenario
Aviation Turbine Fuel
(ATF)
8% 16% 17% 21% 21%
Petrol 20% 10% 5% 3% 0%
Diesel56% 34% 26% 22% 0%
Fuel Oil1% 1% 1% 0% 0%
CNG/LNG/CBG/GH2 8% 18% 17% 22% 10%
v
GH2 Derivatives
(Shipping)
0% 0% 1% 0% 4%
Ethanol/Biodiesel/SAF4% 7% 13% 8% 20%
Electricity 2% 14% 19% 24% 45%
Total Energy (Mtoe) 137 335 250 307 192
Under Net Zero Scenario (NZS), however, the mix pivots decisively toward low-carbon
carriers after 2050. By mid-century, electricity, biofuels, and hydrogen collectively account
for almost half of transport energy use, rising to nearly 80% by 2070. Petroleum products
v consists only clean fuels Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 67
Pathways to 2070: Modelling Transport Demand & Energy Use
phase out almost entirely from road transport, leaving Aviation Turbine Fuel (ATF) as the
main residual fossil fuel – highlighting the difficulty of decarbonising aviation (Refer Figure
4.10 and Table 4.6).
With a decisive shift away from import dependent oil and gas, Net Zero signals reduced
exposure to oil-price shocks and improves macro stability – an effect emphasised in the World
Economic Outlook (WEO 2023)
81
and broader literature linking clean energy uptake with
reduced price volatility risks.
Gas as an alternative fuel: India’s transport sector is expected to see CNG and LNG grow
steadily until around 2050, serving as an effective bridge fuel for urban buses, taxis, and
high-mileage freight fleets. This growth helps cut local air pollution and reduce costs while
the ecosystems for electric and hydrogen-based mobility scale up.
The long-term trajectory of natural gas in transport diverges depending on policy choices. In
Current Policy Scenario (CPS), gas demand is expected to rise, potentially reaching 65 Mtoe
by 2070, which risks locking in fossil assets and slowing the transition.
By contrast, in Net Zero Scenario (NZS), natural gas consumption in transport is projected to
peak at about 32 Mtoe around 2045, plateaus briefly, and then transitions to clean fuels i.e.,
CBG as battery-electric, fuel-cell vehicles, and ethanol-ready flex hybrids reach cost parity
and their infrastructure expands. In this scenario, only Bio-CNG/CBG continues beyond 2055,
serving hard-to-electrify heavy-duty vehicles and passenger vehicles.
India’s strategic emphasis must therefore shift decisively toward zero-emission technologies,
with gas infrastructure designed for flexible repurposing into EV fast-charging or hydrogen
refuelling hubs, and biomethane.
Natural gas has a valuable but time-limited role in India’s transport transition. It can cut near-
term pollution and costs, while the country builds out EVs, hydrogen, and a cleaner grid.
Greater emphasis can be placed on improving the uptake of CBG which is sustainable and
carbon-neutral/negative fuel.
82
EV Systems Planning: The electricity demand is projected to rise to 48 Mtoe in Net Zero
Scenario (NZS) and 47 Mtoe in Current Policy Scenario (CPS) by 2050. Even with higher
electrification under NZS, the demand is nearly similar to CPS due to lower travel demand in
NZS. Both CPS and NZS implies a substantial increase in electricity demand from transport
sector, underscoring the need for robust distribution upgrades and widespread depots/fast-
charging for trucks and buses, managed charging and time-of-use signals to flatten peaks.
Moreover, share of renewable energy should also increase in primary energy mix. Since RE
does not have the conversion losses typically seen in thermal power, this would mean that
electrification of mobility sector shall have relatively lower impact on overall primary energy
demand going into the future. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 68
Pathways to 2070: Modelling Transport Demand & Energy Use
Hydrogen’s targeted role after 2040: Hydrogen use under Net Zero Scenario (NZS) increases
to about 3 million tonnes by 2050 and about 8 million tonnes by 2070. This includes green
hydrogen derivatives consumed in shipping sector (E-methanol and Green Ammonia) of 0.9
million tonnes by 2050 and 2.9 million tonnes by 2070. This aligns with Global views that
long-haul trucking, shipping (via ammonia), and synthetic fuels are prime early demand sectors
in transport. This will require a high capacity of electrolysers and renewables.
Aviation as last challenging frontier: Aviation dominates the remaining liquid fuel component
in Net Zero Scenario (NZS). ATF demand is projected at 43 Mtoe in 2050 and slightly
decreases to 40 Mtoe in 2070. This is consistent with global literature identifying aviation as
among the hardest modes to decarbonise rapidly and therefore reliant on liquid fuels and SAF.
Biofuels: India’s experience over the past few years shows how quickly policy, supply-chain
readiness, and demand alignment can scale a clean energy solution such as biofuel. India’s
rapid ethanol scale-up provides the launchpad. From a negligible base a decade ago, nationwide
blending rose to 20% in mid-2025, five years ahead of the original 2030 target. The next step
is to extend this experience beyond gasoline blending into the wider family of sustainable fuels.
0
5
10
15
20
25
2020 2025 2050 2070
Ethanol
0
10
20
30
40
2020 2025 2050 2070
Sustainable Aviation Fuel
Current Policy Scenario Net Zero ScenarioCurrent Policy Scenario Net Zero Scenario
0
2
4
6
8
10
12
14
16
2020 2025 2050 2070
Biodiesel, bn litres
CPSNZS
0
5
10
15
20
25
2020 2025
BioCNG, bmscm
CPSNZS
Billion LitresBillion Litres
Figure 4.12: Biofuel demand under Current Policy Scenario and Net Zero Scenario by 2050 and 2070
Under Current Policy Scenario (CPS), biofuel is primarily used for road transport. Ethanol
peaks at about 20 billion litres in 2050 and drops to 13 billion litres in 2070. This decline after
2050 is due to increased electrification in transport sector. In contrast, under Net Zero Scenario
(NZS), ethanol plateaus at around 22 billion litres after mid-century. Flex-fuel vehicles act
as a demand-side accelerator here by enabling operation on higher ethanol blends (E20–E85/
E100) without range anxiety (Figure 4.12).
Under Current Policy Scenario (CPS), SAF adoption increases from about 8 billion litres in
2050 to 19 billion litres in 2070. While under Net Zero Scenario (NZS), SAF rises from about
13 billion litres in 2050 to 32 billion litres by 2070.
By 2050s, flex-fuel cars designed to run entirely on ethanol are projected to constitute
around 10% of car sales under the Net Zero Scenario (NZS). These vehicles combine internal
combustion engines optimised for ethanol, offering both energy flexibility and near-zero
lifecycle emissions when powered by sustainable biofuels. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 69
Pathways to 2070: Modelling Transport Demand & Energy Use
Biofuel supply potential in India:
India’s ethanol production currently relies mainly on maize (~50%) and sugarcane (~30%), with
the remainder coming from damaged food grains and other sources. According to the NITI
Aayog Crop Husbandry Report on Demand and Supply (2024), by 2047–48, India’s food grain
production is expected to exceed domestic demand, creating a surplus of over 40 million tonnes.
This potential surplus could support ethanol production of more than 16 billion litres, which
would cover a substantial portion of the expected ethanol requirement of around 22 billion litres,
indicating feedstock availability for higher blending goals without compromising food security.
Beyond ethanol, there is also notable potential for other biofuel pathways. For CBG, The
International Energy Agency (IEA) estimates India’s biogas potential at around 87 billion cubic
metres (BCM), suggesting significant scope for gaseous biofuels in transport sector. For SAF, the
Feasibility Study on the Use of Sustainable Aviation Fuels in India (conducted under the ICAO
ACT-SAF Programme) indicates significant potential for developing a domestic SAF industry,
with production estimates cited around 41.5 billion litres.
At the same time, competing biomass uses will persist, requiring careful assessment of trade-offs
related to cost, energy balance, water use, and emissions.
Life Cycle Assessment of Mobility Technologies – Looking Beyond
Tailpipe Emissions
As India accelerates toward its Net Zero goals, it is essential to evaluate transport technologies
not just through the lens of tailpipe emissions, but across their entire life cycle. A Life Cycle
Assessment (LCA) approach provides a comprehensive view of environmental impacts, spanning
vehicle production, fuel or electricity generation, use-phase emissions, and end-of-life treatment.
This is particularly relevant for emerging technologies like battery electric vehicles (BEVs) and
hydrogen based vehicles, whose environmental benefits vary significantly depending on energy
sources and materials used.
BEVs are often labelled as zero-emission vehicles due to their lack of tailpipe (tank-to-wheel)
emissions. However, this is only one component of their environmental footprint. BEVs typically
incur significantly higher emissions during the production phase, particularly from battery
manufacturing, which relies on energy-intensive extraction and processing of critical minerals like
lithium, cobalt, and nickel. When these emissions are added to those from electricity generation
(well-to-tank), especially from a coal-dominated power mix like India’s, the total life cycle
emissions can be substantial. In fact, recent studies from IIT Kanpur and TERI suggest that under
current conditions, BEVs may need to be driven for around 1.5 lakh kilometres to offset their
initial emissions and become environmentally advantageous compared to internal combustion
engine vehicles. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 70
Pathways to 2070: Modelling Transport Demand & Energy Use
Hybrid vehicles, due to their balanced efficiency and lower reliance on high-impact battery
systems, often outperform BEVs under current Indian grid conditions. However, there exists
studies which indicate otherwise. ICCT and IIT Madras studies point that BEVs have lower
emissions even at current grid emission factor on lifecycle basis. Further, a TERI study suggests
that Bio-CNG can be carbon-negative, and that blending it up to 20% with fossil CNG can make
the overall fuel close to carbon neutral on a life-cycle basis
vi
. Considering these mixed and non-
conclusive evidence, NITI Aayog has launched a study on developing lifecycle assessment for
EVs Vs ICEs based on transparent set of assumptions.
It is complex to compare two vehicle models based on their functionality which could differ based
on Power Output, Occupancy, Affordability, Weight, etc. Various literatures that tailpipe-zero
options like BEVs and hydrogen based vehicles only deliver full climate benefits when powered
by clean energy sources. These results could widely differ for different segment of vehicles (small,
compact, and heavy), also based on biofuel belnding scenarios. The above findings highlight a
critical insight: the decarbonisation potential of new mobility technologies is not inherent, but
highly contingent on upstream energy and materials.
A life cycle perspective is essential for designing robust and future-ready mobility policies. It
shows that electrification alone does not guarantee decarbonisation, especially when deployed in
isolation from grid and supply chain reforms. India’s Net Zero strategy should prioritise not just
tailpipe emissions reductions, but system-wide sustainability. This includes diversifying vehicle
technologies based on application, such as BEVs for urban logistics, hybrids for personal and mid-
range mobility, and hydrogen based vehicles for long-haul freight, while strengthening domestic
manufacturing, ensuring circularity through battery reuse and recycling, and rapidly decarbonising
the power and hydrogen supply chains.
vi Indian Institute of Technology Kanpur (IIT Kanpur). Life Cycle Assessment (LCA) and Total Cost of Ownership (TCO) Analyses
of Battery Electric Vehicles (BEVs), Hybrid Electric Vehicles (HEVs), and Internal Combustion Engine Vehicles (ICEVs). Engine
Research Laboratory, IIT Kanpur.
The Energy and Resources Institute (TERI). Comparative Analysis of Electric Vehicles and Internal Combustion Engine Vehicles
from Resource Efficiency Perspective. New Delhi: TERI, 2023.
International Council on Clean Transportation (ICCT) and Indian Institute of Technology Roorkee (IIT Roorkee). Review of
Greenhouse Gas Life-Cycle Assessments of Passenger Cars in India.
Indian Institute of Technology Madras (IIT Madras). Lifecycle Assessment of Electric and Conventional Vehicles in the Indian
Context.
The Energy and Resources Institute (TERI). Comprehensive Environmental and Social Sustainability Assessment of Bio-CNG
as a Vehicular Fuel in India. New Delhi: TERI. 5
CHALLENGES IN
THE TRANSPORT
SECTOR
TRANSITION 72Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport
5
Challenges in the
Transport Sector
Transition
The preceding chapter outlined India’s transport transition trajectory across the Current Policy
Scenario (CPS) and Net Zero Scenario (NZS) pathways, highlighting the scale of transformation
required through electrification, fuel diversification, modal shift, and efficiency improvements.
While these results demonstrate the technical feasibility of a low-carbon transition, they
also underscore that achieving such outcomes will require addressing a set of persistent and
emerging constraints across the transport system.
In this context, this chapter maps the key challenges in India’s transport landscape, structured
into five thematic clusters aligned with the core policy response pillars: (i) Clean Mobility
Transition, (ii) Infrastructure Utilization, (iii) Fuel Diversification, (iv) Systemic Gaps, and
(v) Public Transport & Modal Integration. These challenges are closely aligned with, and
intended to inform, the suggestions proposed for enabling the sector’s Net Zero transition.
5.1 Accelerating the Clean Mobility Transition
I. Insufficient EV Charging Infrastructure
India has only 52 public charging points per million people, compared with 2,540 in China
and 580 in the US
83
. This shortage drives up costs, increases range anxiety, and slows EV
adoption, particularly for high-utilisation fleets that need fast-charging options. Large variation
is observed in electricity price depending on the charging point location. For example, home
charging electricity price varies from 6-10 INR per unit (depending on the time of the day),
while public alternating current (AC) charging varies from 10-14 INR per unit and public
direct current (DC) charging cost varies from 18-22 INR per unit
84
. AC chargers are slow, and
fast DC chargers are expensive and limited. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 73
Challenges in the Transport Sector Transition
II. Different Total Cost of Ownership (TCO) Parity Across Segments
While two-wheeler EVs have achieved Total Cost of Ownership (TCO) parity, heavier vehicles
are yet to do so. Batteries still make ~40% of the total cost of EV
85
, replacement batteries have
18% GST, and outdated Modified Indian Driving Cycle (MIDC) test overstates performance.
This keeps freight and heavier segments unviable.
III. Import-Heavy EV Supply Chain
EVs need six times more minerals than internal combustion engines (IEA, 2021)
86
and India
is dependent on Chinese imports for critical minerals, cells, chips, and power electronics. This
makes India’s EV transition vulnerable to international price shocks and geopolitical risks,
limiting resilience and self-reliance.
IV. Limited Flex-Fuel Vehicle (FFV) Ecosystem
Flex fuels can play a complementary role in the clean mobility transition, particularly in hard-
to-electrify vehicle segments. India’s ethanol blending (19.9% in 2024-25
87
) saved significant
foreign exchange and avoided petroleum imports. However, sparse retail infrastructure for
dispensing E85/E100, pricing challenges, cautious OEMs, low consumer awareness and food
vs. fuel trade-offs in first generation ethanol hinder growth.
V. Zero-Emission Vehicles
vii
(ZEVs) Acceleration
ZEV pathways can together enable diversified, low-emission vehicle options suited to Indian
driving patterns and fuel availability. ZEVs which include Battery Electric Vehicles (BEVs),
Hydrogen, Biofuels (FFVs and CBG) have no mandates in India. Without segment-wise targets
and incentives, penetration remains low.
5.2 Underutilised Infrastructure and Modal Gaps
I. Underutilised Rail Infrastructure and Freight Modal Share
Despite contributing more than two-thirds of the railway revenue, freight uses only ~40% of
network capacity with passenger trains getting precedence
88
. Average freight speeds remain
at ~23.6 kmph due to shared tracks with passenger trains. While Dedicated Freight Corridors
(DFCs) have raised speeds to ~40–45 kmph, their full potential remains unrealised
89
.
II. Weak Private Participation in Rail Infrastructure
vii For the purpose of this study, Zero Emissions Vehicles mean vehicular fleet in which there are Net Zero greenhouse
gas emissions after accounting of emissions throughout the value chain from production, operation, energy supply to
end-of-life. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 74
Challenges in the Transport Sector Transition
Private investment in terminals and wagons is low due to high capex, unclear revenue-sharing,
and regulatory opacity. Without predictable returns, PPP-based modernisation will remain
limited
90
.
III. High-Cost, Low-Ridership Metro Systems
Metro expansion faces significant cost (up to INR 390 Crore/km
91
) and inadequate fare
recovery. Poor last-mile access and land-use integration also supress ridership.
IV. Underutilised Liquefied Natural Gas (LNG) and Gas Infrastructure
Many LNG terminals operate below 50% capacity due to unaffordable prices
92
. Right of Way
(RoW) delays, and low penetration in transport-sector stall growth and prevent a scale-up.
V. Weak Water Transport Infrastructure
Inland waterways and coastal shipping carry 8% of freight despite offering lower costs
per tonne-km than road
93
. Shallow drafts, underdeveloped terminals, and poor multimodal
integration hinder growth.
5.3 Fuel Diversification
I. LNG Trucking Potential for Medium and Heavy Commercial Vehicles
(MHCVs)
LNG is a promising fuel for long-haul freight, releasing lower emissions than diesel. However,
it faces high upfront cost
94
and limited refuelling stations. There are only around 29 refuelling
stations nationwide (13 state owned and 16 private)
95
.
II. Barriers to Sustainable Aviation Fuel (SAF) Adoption
India has sufficient biomass potential for SAF
96
but lacks feedstock collection and refining
infrastructure. SAF is 1.5 times costlier than jet fuel and could promote unsustainable land
use if dependent on first-generation feedstocks
97
. Achieving the 2% blend target by 2030 will
require regulatory streamlining, capital incentives, and decentralised production capacity.
In addition, obtaining regulatory clearances for commercial SAF production can take a year
or longer, creating a significant bottleneck. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 75
Challenges in the Transport Sector Transition
III. Barriers to Decarbonising Air Travel
Electric and hydrogen aircraft offer near zero emissions but face technical and commercial
barriers, especially for long-haul flights due to energy density and battery weight. R&D must
continue, but short-term gains will come from SAF and improved fuel efficiency.
5.4 Strengthening Regulatory Architecture and Circularity
I. Gaps in Circularity and End of Life Vehicles (ELV) Management
India lacks formal End of Life Vehicles (ELV) recycling infrastructure. Informal scrappage
dominates the sector, resulting in the loss of valuable materials and environmental risks
98
.
II. Semi-High-Speed and High-Speed Rail (HSR) Potential
Indian Railways struggles to meet rising demand for air-conditioned services, pushing
passengers to air travel and luxury buses. HSR can provide a high-comfort, low-alternative
option but faces financing, land acquisition, and coordination hurdles
99
.
5.5 Public Transport and Modal Integration
I. Declining Public and Shared Transport Use
Poor service quality and inadequate integration is reducing public transport usage in urban
areas in the face of rising aspirations leading to greater adoption of private vehicles. Metro,
Regional Rapid Transit System (RRTS), and bus systems should expand based on demand
mapping. Last-mile electric feeders, mini-buses, and shared Intermediate Public Transport
(IPT) (e-rickshaws, autos) should be integrated via Unified Metropolitan Transport Authorities
(UMTAs).
II. Paratransit and Intermediate Public Transport (IPT) Regulation
Gaps
Intermediate Public Transport (IPT) modes remain critical in many cities but lack regulation
on safety, fares, and permits. Organising IPT under service and safety standards will improve
reliability and complement formal transit.
III. Neglected Non-Motorised Transport (NMT)
According to a 2011 census, walking and cycling are used by 36% of commuters
100
. However,
these modes still face a lack of investment and infrastructure that hinder more uptake. 6
TOWARDS NET
ZERO TRANSPORT:
KEY POLICY
SUGGESTIONS 78Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport
6
Towards Net Zero
Transport: Key Policy
Suggestions
In 2020, transport sector accounted for about 10% of India’s GHG emissions and 20% of
the country’s total energy consumption. India’s transport sector will require a fundamental
transformation to reach Net Zero Emissions by 2070.
This chapter provides detailed key policy suggestions to achieve this goal, covering various
segments such as urban transport, future-ready freight, pipeline infrastructure, EV ecosystem,
biofuel economy, and more.
The section below provides a snapshot before going into more details for each suggestion.
Table 6.1: At a glance: Pathways for an efficient transport transition
Actions Targets
Reimagining Urban Transport: Sustainability,
Integration, and Equity
Shape urban transport systems around
sustainability, integration, and equity
Future-Ready Freight: Infrastructure, Modal
Integration, and Domestic Manufacturing
Modernise how India moves goods with cleaner
fuels, domestic innovation, and modal integration
Strengthening Pipeline Infrastructure for Clean
Fuel Transition
Position pipelines as efficient, low-carbon energy
backbones for fuel transportation
Accelerating EV Adoption
Scale electrification with infrastructure, clean
energy access, and circularity
Enhancing Energy Efficiency in India’s Transport
Sector
Raise fuel standards, modernise fleets, and keep
market fair
Driving the Biofuel Economy: Innovation,
Security, and Sustainability
Advance biofuels and Sustainable Aviation Fuel (SAF)
to balance climate, energy security, and rural growth
Strengthening Vehicle Retirement and Recycling
Phase out old vehicles and fleets through
scrappage ecosystems and incentives to deliver
quick air quality wins
Promoting Non-Motorised and Active Transport
Expand safe, climate-resilient walking and
cycling infrastructure
Enabling Systemic Transformation: Unified
Governance, Digital Infrastructure, and Policy
Innovation
Align governance, data, regulation, and
innovation for long-term transformation Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 79
Towards Net Zero Transport: Key Policy Suggestions
6.1 Reimagining Urban Transport: Sustainability, Integration, and
Equity
As Indian cities grow in scale and complexity, urban mobility systems must evolve to become
more inclusive, integrated, and environmentally sustainable. The following Suggestions outline
a strategic approach to align infrastructure, governance, and planning with the diverse mobility
needs of a rapidly urbanising population:
i. Strengthen data-driven planning through regular urban household travel surveys to
assess current and latent travel requirements (e.g., last-mile connectivity) that would
guide low-emission transport investments in urban and peri-urban areas.
ii. Expand and integrate mass transit systems such as sub-urban railway system,
circular rail, metro rail, Regional Rapid Transit System (RRTS), and formal bus
networks, ensuring alignment with demand patterns and user preferences.
iii. Ensure seamless last-mile connectivity by linking major transit systems with
electric feeder buses, mini-buses, and shared mobility services, while formalising
and regulating paratransit modes for safety and accessibility.
iv. Transition State Transport Undertakings (STUs) from operators to regulators
by adopting models such as gross contracting, where private operators run services
under public oversight.
v. Introduce premium bus services in urban areas with differentiated pricing and
service quality, to move car users to public transport.
vi. Enable shared mobility by promoting/facilitating carpooling and ride-sharing
services.
vii. Promote compact, Transit-Oriented Development (TOD) by embedding its
principles in city master plans and revising land-use regulations to support high-
density, mixed-use development near transit hubs.
viii. Institutionalise coordinated governance by empowering/establishing Unified
Metropolitan Transport Authorities (UMTAs) in all major cities and mandating
equity impact assessments for new urban transport projects.
6.2 Future-Ready Freight: Infrastructure, Modal Integration, and
Domestic Manufacturing
The transition to sustainable freight transport in India demands simultaneous investment in
clean energy adoption, enhanced modal efficiency, and domestic technological capability. The Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 80
Towards Net Zero Transport: Key Policy Suggestions
following steps outline a roadmap to decarbonise logistics while strengthening national energy
security and create industrial self-reliance:
i. Promote freight modal shift to rail by setting clear freight rail targets, supported
by dedicated funding including exploring PPPs (double tracking, increased axle loads
& train lengths, scaling Dedicated Freight Corridors (DFCs)), reform freight pricing
system to make it more competitive, and provide assured and timely delivery of
goods, through an independent regulator.
ii. Scale up inland water transport and coastal shipping by using public cargo for
transportation of goods such as fertilizers and coal to seed demand on strategic routes,
especially along major perennial rivers in North-East India, and in coastal regions.
iii. Optimise siting opportunities to multimodal logistics infrastructure such as
logistics parks, integrated freight corridors, and seamless trans-shipment facilities
enabled by end-to-end digital platform to enhance the competitiveness of rail and
water-based freight systems.
iv. Accelerate clean fuel infrastructure by expanding sub-urban railway system,
circular rail, Compressed Bio-Gas (CBG), and flex fuel refuelling stations along
highways, logistics hubs, and industrial corridors, with mandated station density to
ensure accessibility and commercial viability.
v. Enable fleet transition to cleaner fuels through targeted fiscal incentives such as
purchase subsidies, toll and tax exemptions.
vi. Advance hydrogen mobility pilots by scaling demonstration projects for hydrogen
trains, hydrogen fuel based trucks and buses in high-payload sectors, using pilot
results to guide broader deployment strategies.
vii. Strengthen domestic manufacturing ecosystems for clean freight technologies by
supporting R&D and local production of components for cleaner vehicles including
battery systems.
6.3 Strengthening Pipeline Infrastructure for Clean Fuel Transition
Pipelines are most energy efficient mode of oil and gas transportation. Transporting petroleum
products via pipelines reduces the load on road and rail transport, thus easing congestion.
Therefore, it is important to develop pipeline networks to ensure primary movement of
petroleum products such as Petrol, Diesel, Aviation Turbine Fuel (ATF), and Liquefied
Petroleum Gas (LPG) to distribution location/LPG installations be only through pipelines.
In addition, beyond increasing near-term scale-up of Compressed Natural Gas (CNG) and Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 81
Towards Net Zero Transport: Key Policy Suggestions
Liquefied Natural Gas (LNG) as transitional fuels, these pipelines must be envisioned as
future-ready assets that are capable of facilitating the distribution of emerging low-emission
fuels such as CBG, green hydrogen, hydrogen blend natural gas, synthetic methane, ethanol
blends, Sustainable Aviation Fue (SAF), etc. The following steps are recommended to achieve
the above scenario:
i. Accelerate the build out of the national gas pipeline grid by prioritising
connectivity across industrial clusters, high-density freight corridors, urban transport
zones, and into the hinterland to support increased adoption of cleaner fuels like
CNG, LNG, and CBG.
ii. Promote the use of existing and new pipelines for CBG integration by enabling
rural and agro-waste-based gas producers to access urban transport and industrial
demand centres through the City Gas Distribution(CGD) network.
iii. Support pilot integration of hydrogen blends in natural gas pipelines, especially
in industrial hubs and areas with high renewable energy potential, to build technical
readiness and inform broader hydrogen infrastructure planning.
iv. Maximise pipeline utilisation to decongest road and rail networks through
petroleum product pipeline grid by connecting all LPG and major petroleum
distribution installations through pipelines. This strategic shift will free up critical
capacity on rail and road networks, enabling them to better serve expanding passenger
mobility and high-value freight segments.
v. Design all new pipeline infrastructure with future compatibility in mind by
incorporating technical specifications that can accommodate the eventual transport
of green hydrogen, biofuels, and SAF. This includes material compatibility, pressure
ratings, and safety systems aligned with the specific properties of low-carbon fuels.
vi. Promote slurry pipelines for bulk freight to move iron ore and similar materials
through pipelines instead of road/rail by undertaking feasibility studies for connecting
major mines with ports and manufacturing plants. This can reduce both congestion
as well as emissions.
6.4 Accelerating EV Adoption
Electrification of road transport must be aggressively pursued, with an enabling policy
environment for infrastructure and market development. The key interventions that can help
in accelerating electric mobility focus on systemic changes across vehicle electrification,
charging infrastructure, finance, and policy frameworks to accelerate the adoption of electric
vehicles in the country. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 82
Towards Net Zero Transport: Key Policy Suggestions
6.4.1 Strengthen the EV Charging Network
i. Expand EV charging and battery swapping infrastructure with density targets (1
charger per 30 EVs- like US, Norway, and 1 station per 50-100 km on highways).
Develop shared charging hubs in urban clusters and along highway corridors, anchored
by fleet operators. To address range anxiety for EVs, establish a nationwide network
of Battery Charging cum Swapping Stations (BCSS) along National Highways,
with priority to high-density freight and passenger corridors. The Government may
consider allotment of land on long-term lease at concessional or promotional rates
near highways to encourage the setup of BCSS. Prioritise the rollout of battery
swapping networks for taxis, delivery fleets, and other high-utilisation vehicles,
and set national and sub-national targets for charger and swapping station density,
supported by clear standards for interoperability, safety, and accessibility.
ii. Strengthen regulatory and financial enablers by mandating EV-ready infrastructure
in all new public buildings and 10-20% of private buildings, retrofitting existing public
spaces, and providing capital and operational subsidies for charging infrastructure
until it reaches commercial viability.
iii. Enable intelligent and consumer-centric charging systems through smart metering,
time-of-day pricing, and rollout of vehicle-to-grid (V2G) integration standards.
Institutionalise the right to demand an EV charger under consumer protection laws
and operationalise digital visibility through a Unified Energy Interface (UEI) to
support transparent and efficient energy use.
6.4.2 Accelerate EV Deployment and Availability of Clean Power
i. Promote fleet electrification at scale through aggregated procurement of e-buses
and e-taxis, supported by risk-sharing guarantees and RESCO (Renewable Energy
Service Company) models to reduce upfront capital costs. Prioritise electrification
along the top 20 freight corridors by deploying charging and battery swapping
infrastructure, offering time-bound toll waivers, and enabling demand aggregation.
ii. Streamline clean energy access for EV charging by unlocking virtual and group net
metering pathways across all consumer classes, and simplifying adoption processes
in states with existing regulations.
iii. Introduce green tariff options for EV users lacking access to on-site or direct
renewable energy procurement.
iv. Set domestic manufacturing targets for EVs and components as a share of total
production, with a focus on high-volume segments such as two- and three-wheelers,
buses, and trucks. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 83
Towards Net Zero Transport: Key Policy Suggestions
6.4.3 Develop a Circular Economy for EV Batteries
i. Strengthen battery end-of-life management by ramping up collection, establishing
deposit-refund or alternative recovery schemes, and adopting national guidelines for
safe handling, transport and storage of retired lithium-ion batteries.
ii. Promote battery circularity and reuse through standards for refurbished and
second-life applications, circularity-friendly battery design, and safety certifications
to support safe dismantling, reuse, and resale of EV batteries.
iii. Invest in battery innovation and traceability by providing dedicated R&D funding
for environmentally sustainable recycling technologies and developing a “Battery
Aadhaar” system for traceability, data management and lifecycle monitoring.
6.5 Enhancing Energy Efficiency in India’s Transport Sector
Improving energy efficiency in transport is essential to achieving a low-emission, high-
performance mobility system. By embedding efficiency into the core of transport planning and
operations, India can significantly reduce its energy footprint from mobility while supporting
sustainable economic growth.
i. Strengthen regulatory ambition by advancing Corporate Average Fuel Efficiency
(CAFE) norms, ensuring India remains competitive in adopting advanced automotive
technologies covering all categories of vehicles and enhancing fuel efficiency. Further,
Bharat Stage (BS) emission standards need to be aligned with global benchmarks
like Euro 7.
ii. Accelerate electrification of high-utilisation transport modes by prioritising
electrification of commercial vehicles–buses, taxis, and urban freight vehicles. This
ensures that maximum “passenger-kilometres” and “tonne-kilometres” are converted
to low-emission modes.
iii. Modernise vehicle design and fleet composition by mandating aerodynamic
and lightweight designs for trucks and buses to improve fuel efficiency. Introduce
incentives for fleet renewal and enforce stringent maintenance standards to phase
out inefficient, polluting vehicles.
iv. Introduce pricing, taxation, and incentives as the evolving nature of technologies
makes it prudent to ensure a level playing field by not having a tax structure that
tilts the scales in favour of one technology or fuel or the other, and let the market
determine consumer preference. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 84
Towards Net Zero Transport: Key Policy Suggestions
6.6 Driving the Biofuel Economy: Innovation, Security, and
Sustainability
As India scales up its efforts to decarbonise the transport sector, biofuels offer a strategic
pathway to reduce emissions, enhance energy security, and create rural economic value. The
following suggestions outline a roadmap to accelerate adoption of biofuels, while fostering
domestic innovation and minimising ecological trade-offs:
i. Promote and incentivise flex-fuel vehicles by enforcing regulations that require new
vehicles to support multiple ethanol-petrol blends and bio-diesel blends. Offering
tax benefits or fuel price rebates will also encourage consumer adoption.
ii. Accelerate development of second- and third-generation biofuels using non-food
feedstocks such as agricultural waste, algae, and municipal solid waste to address
food security and land-use concerns.
iii. Boost domestic Sustainable Aviation Fuel (SAF) production through capital
subsidies, viability gap funding (VGF), and green tax incentives, with a focus on
second-generation feedstocks such as used cooking oil and agricultural residues.
iv. Scale Compressed Bio-Gas (CBG) production via dedicated funding through
blended finance mechanisms, feed-in tariffs, streamlined grid injection, binding
state targets, blended finance, guaranteed offtake pricing, and reliable feedstock
aggregation networks for consistent plant operations.
v. Position India as a Global Biofuel hub by leveraging its feedstock availability,
refining capacity, and domestic market scale to lead in biofuel innovation and exports.
6.7 Strengthening Vehicle Retirement and Recycling
Phasing out older commercial vehicles can significantly reduce harmful emissions and improve
air quality in India. A study found that a 15-year-old diesel car emits 7.6 times higher PM
and 3.4 times higher NOx than a BS-IV car. It is estimated that scrapping trucks and buses
older than 15 years can lead to a 17% reduction in CO
2 emissions, 18% in Hydrocarbon
(HC) and NOx emissions, and 24% in PM emissions. Given the sheer volume of aging,
high-emission vehicles in India, accelerating their scrapping will be crucial to the country’s
decarbonisation strategy. A scrappage programme would not only improve urban air quality
but also directly contribute to lowering the transport sector’s emissions footprint. Following
are the key initiatives to promote scrapping of older vehicles in India: Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 85
Towards Net Zero Transport: Key Policy Suggestions
i. Mandate state-level scrappage policies to strengthen ELV recycling ecosystems
with a focus on phasing out older, high-emission Internal Combustion Engine
(ICE) vehicles to reduce pollution and improve fleet efficiency. All states and union
territories should formulate and notify their own vehicle scrappage policies aligned
with the national framework.
ii. Establish scrappage facilities through PPPs by offering concessional land from state
governments and enabling private sector participation in infrastructure development.
iii. Provide targeted financial incentives such as scrappage subsidies, road tax
waivers, reduced registration charges, and lower parking fees to encourage voluntary
scrapping and adoption of low emission vehicles.
iv. Simplify and rationalise registration and Regional Transport Office (RTO) fee
structures on a periodic basis to ease the financial burden of transitioning to low
emission vehicle.
v. Launch public awareness campaigns to inform citizens about the environmental
benefits and available incentives under the scrappage policy, fostering greater
participation.
6.8 Promoting Non-Motorised and Active Transport
Improving non-motorised transport (NMT) infrastructure is essential for achieving India’s Net
Zero goals, especially considering that 36% of Indians walked or cycled to work according
to Census 2011. Walking and cycling are zero-emission modes of transport and present a
major opportunity to lock in low-carbon travel behaviour if cities invest in safe, accessible
and well-connected pedestrian and cycling networks. Following are some key steps to create
a safe NMT infrastructure and promote higher NMT use:
i. Scale-up well-designed pedestrian pathways and cycling networks across cities
and towns to support a safe and inclusive infrastructure for everyday mobility.
ii. Conduct targeted awareness campaigns and use behavioural nudges to promote
walking and cycling for short trips, and public or shared transport for longer journeys.
iii. Embed NMT in urban mobility planning to ensure it is integrated into broader
transport strategies and accessible to all socio-economic groups.
iv. Design for climate resilience by ensuring that NMT infrastructure is built to
withstand extreme weather events and climate-related disruptions, particularly in
vulnerable regions. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 86
Towards Net Zero Transport: Key Policy Suggestions
6.9 Enabling Systemic Transformation: Unified Governance, Digital
Infrastructure, and Policy Innovation
Achieving inclusive, scalable, and sustainable mobility requires a forward-thinking, open
approach to technology and data sharing. An Open Data Policy will ensure efficient and
integrated transportation system. There is a critical need to design systems that can support
innovation, growth, and evolving mobility needs from the outset. A Digital Public Infrastructure
(DPI) for mobility offers immense potential in this field and should be prioritised. DPI in
mobility can help to enable the following measures:
i. Establish an executive body (i.e., Low‑Carbon Development Cell / Secretariat)
under the Prime Minister’s Climate Change Council (PMCCC) to coordinate
among the various line ministries/ departments, provide continuous analytical
support, coordinate cross‑cutting bottlenecks, and issue implementation guidance
that aligns missions and schemes across all energy sectors.
ii. Leverage instruments such as the India Carbon Market (ICM) to accelerate
decarbonisation by enabling credit generation from low-carbon transport initiatives
like fleet electrification, modal shifts, and clean fuel transitions.
iii. Build open and interoperable digital infrastructure by scaling up shared platforms,
registries, and protocols such as the Unified Energy Interface (UEI) to enable
seamless integration and innovation across mobility services, drawing inspiration
from successful models such as the Unified Payments Interface (UPI).
iv. Mandate a periodic review cycle for transport-related laws, including the Motor
Vehicles Act and National Urban Transport Policy to promote shift to cleaner fuels.
v. Transition from fragmented systems to unified data ecosystems by expanding
initiatives like the India Urban Data Exchange (IUDX), fostering collaboration
between public and private actors, and reducing duplication in service delivery.
vi. Phased approach towards Zero-Emission Vehicles: The transition strategy should
begin with the phased elimination of polluting diesel vehicles and the adoption
of lower-emission technologies such as CNG, hybrids, and electric vehicles. The
subsequent phase should advance the use of biofuels through flex-fuel vehicles
(FFVs), high Compressed Bio-Gas (CBG) blends, and hybrid FFV models, alongside
continued growth in EV adoption. The final phase should ensure full deployment of
zero-emission vehicles (ZEVs) such as EVs, FFVs, hydrogen based vehicles, and
CBG-based models. To drive this transition, set segment-specific targets with clear
timelines and compliance mechanisms across all vehicle segments. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 87
Towards Net Zero Transport: Key Policy Suggestions
vii. Reforming costs and taxation by reducing GST on replacement batteries, and
providing incentives for lighter, energy-dense technologies till total cost of ownership
(TCO) parity is achieved.
viii. Discourage personal vehicle ownership by implementing congestion pricing, high
parking fees, and ownership taxes in urban centres.
ix. Align the transport strategy with India’s Long-Term Low Emission Development
Strategy (LT-LEDS) by incorporating traffic management as a mitigation lever,
including congestion management, Intelligent Transportation Systems (ITS), demand-
side management, and integrated urban transport planning.
x. Embed road safety as a national priority within unified governance structures.
Coordinated action across vehicle manufacturers, road design standards, and
enforcement agencies should be institutionalised to reduce traffic fatalities. This
goal should be integrated explicitly into national mobility policy through enforceable
targets, transparent monitoring, and responsive intervention mechanisms.
xi. Institutionalise long-term innovation by funding dedicated transport research
centres and supporting startups and communities in co-creating scalable mobility
solutions.
xii. Promote Mobility as a Service (MaaS) platforms through tax incentives and digital
infrastructure support.
xiii. Build professional capacity by expanding programmes in transport planning, policy
and economics. 7
CONCLUSION:
CHARTING A
COHESIVE PATH
TOWARDS NET ZERO
MOBILITY 90Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport
7
Conclusion: Charting a
Cohesive Path Towards Net
Zero Mobility
India’s transport sector has a pivotal role to play in acheiving two defining national priorities:
Viksit Bharat by 2047 and Net Zero Emissions by 2070.
The modelling results in this report make clear that a business-as-usual path in the transport
sector will lead to rising costs, congestion, and emissions. In contrast, a Net Zero pathway
offers cleaner air, lower oil imports, improved competitiveness, and safer, more inclusive
mobility.
7.1 A Systemic Shift Rather than Incremental Change: Technology as a Driver
Transport sector in 2020 contributed around 10% of India’s GHG emissions which could
double by mid-century without intervention. The Net Zero Scenario shows that only deep
structural change can reverse this. Electrification of road and rail, alongside innovation in
batteries, hydrogen, and Sustainable Aviation Fuel (SAF), is central. Innovation must be both
high-tech and high-context - attuned to India’s economic diversity, regional infrastructure,
and energy resource availability.
7.2 Strategic Policy & Governance Levers
India already has strong policies such as FAME (Faster Adoption and Manufacturing of
(Hybrid &) Electric Vehicles), CAFE (Corporate Average Fuel Efficiency) norms, National
Logistics Policy and PM Gati Shakti. But to achieve Net Zero, they must be expanded and
harmonised with climate objectives. Investments in electrification infrastructure, rail and
waterways capacity, and urban mobility reforms (e.g., Transit-Oriented Development, Non-
Motorised Transport infrastructure) are not just desirable, they are indispensable. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 91
Conclusion: Charting a Cohesive Path Towards Net Zero Mobility
7.3 Modelling Insights
The modelling also confirms technical feasibility of India’s decarbonisation - if backed by
enabling policies, robust institutions, and adequate financing. Under the Net Zero Scenario
(NZS):
i. Rail’s share in passenger transport increases to 25% and freight goes to 30% by
2070.
ii. Private car ownership is reduced by 20% relative to Current Policy Scenario (CPS)
due to enhanced public and shared mobility.
iii. Electrification remains the dominant strategy for decarbonising passenger and freight
road transport, while partial electrification i.e. hybridisation acts as an impetus to
full electrification in the initial phases.
iv. Clean fuels like ethanol, green-hydrogen, Compressed Bio-Gas (CBG), Sustainable
Aviation Fuel (SAF), ammonia and e-methanol, emerge to complement electrification,
supporting rural, industrial and long-distance mobility needs.
7.4 An Inclusive and Pragmatic Transition
India’s transition must balance climate ambition with socio-economic realities. The shift to
green mobility must ensure affordable access for all, supporting workers and industries in
transition, and avoiding premature stranding of fossil-based infrastructure. Hybrid solutions,
retrofitting legacy fleets, and skill development for a green workforce will be essential to
manage the transition without economic dislocation.
7.5 Enabling the Future: Institutions, Investments & Innovation
India’s ability to achieve Net Zero emissions in transport by 2070 hinges on a coherent policy
ecosystem:
i. Infrastructure investments (Bharatmala, Dedicated Freight Corridors (DFCs),
Sagarmala, Semi-high and High Speed Rail)
ii. Technology-specific programs (Production Linked Incentive for batteries, National
Hydrogen Mission)
iii. Integrated planning frameworks (PM Gati Shakti, National Rail Plan)
These initiatives not only shape the technical assumptions of the Net Zero Scenario (NZS)
but also ground its feasibility in current institutional progress. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 92
Conclusion: Charting a Cohesive Path Towards Net Zero Mobility
Conclusion
India has the opportunity to lead by example globally by decarbonising one of the most
challenging sectors by making mobility cleaner, safer, and more accessible. Achieving this
will require sustained political will, public-private collaboration, innovative financing, and a
whole-of-government and whole-of-society approach.
By advancing these elements together, India will not only meet its climate commitments
but will also set a global benchmark for clean, inclusive and future-ready mobility systems.
The Net Zero pathway in transport is not just an environmental necessity, but a national
development opportunity. ANNEXURES 94Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport
Annexure A:
Assumptions for
Calculation of BPKMS/
BTKMS
*
1. Macroeconomic Assumptions: Population projections and urbanisation rate based
on MoHFW (till 2036) and UN population projections after 2036 (Latest update
published in 2024)
Table A.1: Population and Urbanisation Assumptions
Category2020 2025 2050 2070
Population (Million) 1347 1411 1596 1621
Urbanisation (%)34.9% 37% 51%
64.7%
2. Table below summarises the key operational parameters assumed for different on-
road vehicle segments, including typical occupancy for passenger modes, payload for
freight vehicles, annual vehicle kilometres (VKM) travelled, and utilisation factors.
These stylised values reflect typical Indian operating conditions drawn from national
communications, transport studies, and freight assessments, and are used to convert
vehicle activity into pkm and tkm for energy and emissions modelling.
Table A.2: Input Parameters for Passenger and Freight Vehicle Segments
Input
Parameters
2W
3W
4W-Cars
4W-Taxis
Buses
Omnibuses
LCV<=3.5
Ton
MCV> 3.5
Ton and <=
12 Ton
HCV > 12
Ton
Occupancy 1.2 3.3 2.6 2.8 38 10 - - -
Payload - - - - - - 1.5 5.7 19.5
VKM 7500259151150070000750003650025,00030,00075,000
Utilisation 70% 70% 75% 90% 75% 25% 60% 70%70%
*
Billion passenger-kilometres (BPKMs), Billion tonne-kilometres (BTKMs) Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Transport 95
Annexure A: Assumptions for Calculation of BPKMS/ BTKMS*
3. Table below presents the assumed mileage values for major on-road vehicle segments
in India (2Ws, 3Ws, 4Ws, buses, omnibuses, and freight vehicles from LCV to
HCV) across conventional and alternative powertrains. These values are drawn from
available literature and based on expert consultations, and are intended for use in
scenario modelling and comparative analysis of energy demand and emissions across
modes.
Table A.3: Vehicle Mileage by Segment and Powertrain for India
Mileage 2W 3W 4W BusesOmnibusesLCV MCV HCV
Petrol (km/L) 52 25 15 - - 14 3 -
Diesel (km/L) - 27 16 4.5 7 15 5 4
CNG/LNG (km/kg) - 25 23 7.5 10 19 6.7 3.3
Electric (km/kWh) 33 18 6.25 1 1 5.8 3.5 0.9
Hydrogen (km/kWh) - - 2.220.36 - 3.6 2 0.55
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