Can India leave China behind?
The Indian cargo industry is seeing signs of growth with the country’s jump to third rank in the Agility report. But the report places China on the top. So what can India do to rise faster? Some experts share their views.
Economic growth means growth in the country’s transportation and logistics industry. While India ranked third in the emerging markets logistics index for 2016 by Agility which rates countries based on business environment, China and the United Arab Emirates were first and second respectively.
China has good port infrastructure facilities. India, being a peninsula country, has the potential to utilise its location and reap benefits of the waterways. Also, there is a need for better infrastructure for sea transportation for growth of the industry. So what can India do to go beyond China? According to the Agility report nearly 42 per cent optimists and logistics professionals sense India needs more structural reform to sustain its current growth and more than 21 per cent believe the country needs more than economic reform if it is to unlock its potential. investors, which in result would accelerate the growth rate and help logistics companies optimise their operations to reduce costs and expand their business.”
“The relative success of China lies in its ability to provide better physical infrastructure and easy availability of cheap credit. Within infrastructure funding, the contribution of India’s Rajendra Singh Rao, ASR Logistics India. Director, “Lower transaction costs have also given Chinese exports a much-needed competitive edge. For example, it takes around 40 days to book a container for exports in India as compared to just one day in China,” adds Rao.
“Major reason for China being on first position is because they have invested heavily and indeed taken utmost care of logistics infrastructure because the key to higher export is a smooth infrastructure to support,” notes GS Chawla, Managing Director, Ocean King Shipping.
According to Cauchy, India has a vast landscape and the demography here is favourable as compared to China. He adds, “However, to match up to the global standards, India needs to adopt newer technologies, innovation and better fundamental infrastructure in the logistics industry. A better connectivity via air, road and sea is required as it poses a hindrance and minimises the outreach currently. The deployment of a robust infrastructure will provide panoramic advantage for the future both in terms of skill development, business facilities and consumption.”
Echoing similar views, Rao points infrastructure as an obstacle to growth. “Infrastructure in India’s metros is inadequate for serving existing trade needs. Challenges range from the availability of assets to congestion, regulation and monitoring. In future, industrial clusters will need Dedicated Freight Corridors (DFCs) such as the Delhi-Mumbai Industrial Corridor with high-speed connectivity to key ports and urban centres,” he says.
When asked about the logistics tactics and strategies that should be used in making the country’s logistics industry stronger across the world, Cauchy says, “First of all, there is a need for a more mature mindset of this industry in the supply chain market. Secondly, we also strongly feel that India definitely needs to accelerate the implementation of the GST bill which in turn will favour the global logistics development and prepare India to be the logistic hub of the world.”
According to Chawla, “India has two sides of large coastal line which can strategically be utilised for world class ports if east coast ports (Vizag, Chennai, Kolkata) could be developed and connected with hinterlands via dedicated railway freight corridors and road infrastructure could be improved. With this east bound in/out marine traffic do not need to call at western ports that are Nhava Sheva, Mundra or Pipava. Let all container traffic run on inland rails and connect with Eastern India ports. Similarly with west bound marine traffic to be operating from western ports. This way we would be optimistically utilising domestic freight services and also decongest the ports.”
According to Ajay Khosla, DGM, Jaipur Golden Transport, “India has already created a showground for global businesses to invest here with changing government policies. There is gigantic investment and plans in our present budgets to totally revamp Indian ground transportation to reach every inch and corner of the country. Although Indian logistics
India has two sides of large coastal line which can strategically be utilised for world-class ports if east coast ports could be connected with hinterlands There is gigantic investment and plans in our present budgets to totally revamp Indian ground transportation to reach every inch and corner of the country
sector has come a long way but still lot to attain to face global markets. Today where world overall economy environment is slowdown, Indian economy is growing with steady speed, already recorded 7.3 per