India makes case before WB for logistics ranking push

World Bank incorporating more data to make LPI comprehensive

With the World Bank looking to incorporate more data into its decision-making process for the International Logistics Performance Index (LPI), a key indicator of ease of trade, India has made its case for a better score to the multilateral financier citing several reforms, Business Standard has learnt.

India is currently ranked 38th (up from 44th earlier) in the LPI 2023, and it shares this rank with Portugal, Saudi Arabia, Turkey, and Lithuania. The Centre has previously expressed its dissatisfaction with the index’s methodology. Singapore topped the index in 2023.

“The World Bank is now utilising much more granular data and engaging in big data-oriented conversations with countries so that the upcoming index is more grounded in reality than subjectivity and perception, which formed a major part of the methodology,” a government official aware of the developments said.

A team of officials from several logistics-linked and infrastructure ministries, such as commerce, railways, ports and shipping, road transport and highways, among others, is currently in Washington DC. It has apprised the World Bank of infrastructure works in the country and initiatives such as PM Gatishakti National Master Plan (NMP), Logistics Data Bank, and facilitating datasets such as e-way bills and more.

Till 2023, the index was made through a survey, which was essentially sentiment-based scoring by trade stakeholders, along with datasets to be provided by participating countries on six key metrics -- customs, infrastructure, internal shipment, logistics competence, tracking and tracing, and timeliness. The index has so far focused on lead times for container shipping, aviation, postal parcels, EXIM delays (dwell time).

“At the moment, the world bank’s LPI is based on a very subjective analysis. We are trying to bring in objectivity by impressing upon the World Bank how we are using technology to improve logistics in the country by way of Unified Logistics Integration Platform (Ulip),” union special secretary for logistics Sumita Dawra had said in September.

In June, Rajesh Kumar Singh, secretary, Department of Promotion of Industries and Internal Trade (DPIIT) had reportedly met World Bank officials during his visit to the US and presented India’s case for change in the ranking methodology. Queries sent to a World Bank spokesperson remained unanswered at the time of going to press.

“LPI scores have two limitations. First, the experience of international freight forwarders might not represent the broader logistics environment in poor countries, which often rely on traditional operators… Second, for landlocked countries and small island states, the LPI might reflect access problems outside the country assessed, such as transit difficulties,” the World Bank said in the methodology section of LPI 2023.

Landlocked countries can face numerous challenges despite trade facilitation efforts due to the complexities of international transit systems, and these inefficiencies can't be eliminated with domestic reforms, according to the multilateral institution.