NEW DELHI:
Exporters have asked the government to expedite major infrastructure projects
like Sagarmala, Bharatmala and the eastern and western dedicated rail-freight
corridors to help improve India''s logistics facilities.
Citing inefficient freight movement, time taken for movement of trucks and road
transportation being the preferred mode of transportation as the root causes of
high logistics costs in India, they said high indirect costs of trade caused by
undependable transportation and delays contribute to 38-47% of total
transportation and logistics costs. India''s logistics and transportation costs
are pegged at 14.4% of the GDP as against 8% of GDP in China.
For exporters, unreliable lead times do not necessarily increase inventory for
themselves, according to Federation of Indian Export Organisations (FIEO) and
Confederation of Indian Industry (CII). "But it does increase inventory
for their customers or distributors abroad, making them less attractive as a
sourcing partner and also their product less competitive," the two industry
bodies said in a study on export logistics in India. India''s cost to export
stood at a $1,332 per container compared with $572 in Indonesia or $525 in
Malaysia, as per the study.
The commerce department had commissioned the study in April last year to study
the status of logistics in India, the constraints it faces and the strategy to
address these. The results of the study have come at a time when the newly-set
up logistics division in the commerce department has kicked off an ambitious
national logistics plan to allow seamless movement of inputs and finished goods
across the country.
Source: EtRetail.Com, India Thursday, 25 January 2018