Business Standard

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.

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