Indian exports boost by US$ 5.5 bn
In a study by Confederation of Indian Industry (CII) and Maersk, it has been revealed that reducing the costs of trade can boost exports by five to eight per cent.
The study also identified specific challenges, problem areas and proposed relevant solutions on the basis of inputs received through the survey
The study called “Stimulating India’s EXIM Growth” reports that indirect/ hidden costs of trade in textiles, pharmaceuticals, electronics and auto components accrued from unreliable transport services and regulatory/ bureaucratic delays are as high as 38–47 per cent of the total logistics cost. A 10 per cent reduction can boost India’s competitiveness and contribute additional revenues of up to US $ 5.5 billion annually. The findings were released at a cross-industry seminar where Rajive Kumar, Secretary Shipping and A K Bhalla, Director General of Foreign Trade were present.
“Expansion of trade is a key driver of economic growth. While we need timely and cost-effective transportation to support this expansion along with a robust policy, it is also critical to address challenges like inadequate inland infrastructure and indirect and hidden costs”, said Rajeeva Sinha, Co- Chair, CII National Committee on Ports & Shipping, in adding, “Our study analyses just how much socio-economic value could potentially be generated if India improves trade efficiency. Going a step further, we have identified segments where companies experience the most delays and collaborated with business leaders to identify specific solutions to address these challenges most effectively.” “The outlook for global trade in 2017 remains weak. Real growth is expected between one and two per cent. India can improve its share of global trade, especially in exports, through increased competitiveness and be probably the only country to deliver nearly doubledigit growth in container trade this year. Reducing costs by a fourth can substantially boost exports in just these sectors. But the solutions identified have the potential to benefit all export sectors and create a multiplier effect,” said Franck Dedenis, Managing Director – India, Bangladesh & Sri Lanka Cluster, Maersk Line.
The study also identified specific challenges, problem areas and proposed relevant solutions on the basis of inputs received through the survey conducted across the four sectors and with other relevant experts.
Added Julian Bevis, Senior Director South Asia, Maersk, “Indian ports and terminals are well placed to deliver efficiencies and higher productivity. APM Terminals in Nhava Sheva has consistently increased its container throughput and productivity since 2006 and thus has improved India’s liner shipping connectivity delivering an additional nine per cent in trade for the country since. We believe terminals can collectively contribute better to lowering costs of trade with certain interventions such as market driven tariff regime, better rail connectivity from ports and reducing middle men or increasing transparency in inland movement of cargo among others.” The solutions identified through survey and at the seminar at length were: Regulatory Documentation: Development of digital tools for reducing time and red tape around documentation; Faster clearance of