India’s road travel sector is on the cusp of a major digital overhaul as the government prepares to implement a GPS-based toll collection system from May 1, gradually phasing out the existing FASTag infrastructure.
The new system, which harnesses Global Navigation Satellite System (GNSS) technology, is designed to calculate toll fees based on the actual distance travelled by vehicles, ushering in a more efficient, transparent, and eco-conscious model of highway tolling. In what marks a paradigm shift in the country’s transport infrastructure, the system will eliminate the need for physical toll plazas and Radio Frequency Identification (RFID) scanners. Instead, vehicles will be equipped with on-board units (OBUs) that use satellite tracking to monitor movement on national highways. Toll charges will be automatically deducted from linked digital wallets—either prepaid or postpaid—based on the kilometres travelled.
The initiative is being spearheaded by the National Highways Authority of India (NHAI) and comes as part of a larger national agenda to digitise mobility, reduce vehicular idling, and cut fuel wastage at toll booths. According to officials involved in the project, this transformation aims not only to ease traffic congestion but also to enhance environmental sustainability through decreased emissions at choke points across the national highway network. Government officials have confirmed that a formal tolling policy will be unveiled in the coming days. The policy will lay out the technical, regulatory, and operational framework for the GNSS-based system. While existing FASTag infrastructure will remain operational during the transition, the long-term goal is a complete phase-out in favour of satellite-based tolling.
Experts in the transport sector view this as a critical intervention in India’s journey towards smart and sustainable urban mobility. By tying toll charges directly to road usage, the system embodies the principle of ‘user pays’, allowing for fairer distribution of highway maintenance costs. It also addresses one of the most common grievances of commuters—uniform toll charges regardless of the distance travelled. Environmental planners have welcomed the move, citing the potential reduction in carbon emissions and fuel consumption due to the removal of bottlenecks at toll booths. With vehicles no longer needing to stop and start repeatedly, the carbon footprint of daily highway commutes is expected to fall significantly. This aligns with India’s broader commitment to achieving net-zero emissions and building low-carbon infrastructure.
The OBUs, to be installed in vehicles, will be interoperable with satellite tolling systems and linked with digital payment platforms. This system will also feature a real-time dashboard for users to monitor toll expenses, enabling greater financial transparency. Pilot projects have already been conducted on select highway stretches, with promising results in accuracy, speed, and public acceptance. Industry analysts believe this could spark a technological renaissance in India’s road infrastructure ecosystem. Apart from easing urban congestion and improving traffic flow, GPS-based tolling could also play a pivotal role in reducing logistic delays and improving supply chain efficiency across the country. With India’s logistics sector aiming to become globally competitive, smarter toll systems are seen as foundational to modern freight movement. From a governance perspective, the move could reduce the scope for revenue leakages and corruption, long-standing concerns associated with manual tolling systems. Automated digital toll deduction, directly linked to a user’s travel history, offers minimal room for manipulation while creating a reliable dataset for infrastructure planning and maintenance.
The transition, however, is not without its logistical and equity challenges. Concerns have been raised about the accessibility of OBUs for users in rural and economically weaker sections, many of whom rely on older vehicles or lack access to digital payment infrastructure. To address this, officials are working with state transport departments and financial technology partners to ensure that the rollout is inclusive and does not disproportionately burden marginalised commuters. In the first phase, the GPS tolling system will likely run in parallel with FASTag to ease user adoption and allow authorities to fine-tune the model based on real-time feedback. Officials suggest that the system could be fully rolled out across all national highways within a year, depending on user compliance and infrastructure readiness.
The shift from static toll booths to a dynamic, distance-based toll model reflects a global best practice already adopted in countries such as Germany, Russia, and Singapore. India’s adoption of this technology places it among the ranks of nations modernising transport governance through intelligent, sensor-based systems. For India’s urban and regional planners, the implications are significant. Improved travel speeds and lower emissions contribute not only to climate goals but also to better air quality in urban areas, which continue to grapple with dangerously high pollution levels. For the public at large, the shift promises shorter travel times, reduced fuel bills, and less frustration on the road—a trifecta of benefits that redefine the citizen’s experience of mobility.
While the ultimate test will lie in execution and public reception, the move towards GNSS-enabled tolling appears to be a decisive step towards an intelligent, user-centric, and environmentally sound highway system. As India drives forward on the path of digital transformation, this reform in toll policy could well become a template for other developing nations aiming to strike a balance between economic growth and environmental stewardship.
India Highways to Go Digital with GPS Tolls Replacing FASTag Nationwide
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