WTO pact or not; India has to catch up fast on trade facilitation; costs are prohibitive: ASSOCHAM
India may sequence its agreeing to the WTO Trade Facilitation Agreement depending on its strategic interests, but the country must improve on its own cross-border highly under-performing trade logistics resulting in shipping cost of export from India twice over China and near about three times that from Singapore, ASSOCHAM has said.
the turnaround time at India's best port, JNPT in Mumbai
handles more than 50% the country's containers, is 1.1 days (36
hours) while it is less than 12 hours in Singapore, Dubai, Shanghai
A high level of logistics costs
could affect India's competitiveness, particularly for the products
of value additions, the study said.
whatever position we take in the multilateral fora, there are certain
things for which we do not really need any nudge from the
international obligations. If at all we want to become an exporting
nation with a strong manufacturing base, the Indian logistics
infrastructure be it port, airport, roads, rail network must be of
international class , built seamlessly entire through the system,"
ASSOCHAM President Rana Kapoor said.
According to the
study, India's port handling charges are much higher while the
logistics systems are under-performing relative to China, Thailand,
South Korea, Malaysia and OECD countries.
in transporting goods are one of the most irritating experiences for
the businesses within India and those engaging with the international
trade. Presently there are 177 inter-state checkposts and 268 toll
plazas across national highways, leading to costly delays.
solutions like smart cards for toll payments and pre-paid state taxes
through online are required without delay. In fact, the success
of the much awaited Goods and Services tax (GST) will also depend on
having an efficient inter-state transport system.
entire transport sector must be dealt with in a holistic manner and
there is a great case for a well integrated system across different
departments of the Centre and the state governments. Presently
transport operatorsare to deal with plethora of inspectors, police
personnel, road transport authority officers, toll officers, and port
handling staff. The policies are also fragmented.
instance, there are eight different departments looking after
transport, shipping , road transport, highways, civil aviation,
airports , airlines and those dealing with rural roads, which are
also key links to the rural India," the study noted with
The road transport in particular,
involving lorries, trucks, light commercial vehicles, is
under-capitalised and not well integrated since it has a presence of
a large number of small and medium sized enterprises. The
business model of 'single goods carrier' is becoming difficult to
operate in a viable manner whereas the big players are finding the
policies too complicated to put their investment," said Kapoor.