Shipping costs incurred by Indian exporters is twice as high as compared to those of China and thrice of Singapore, putting the country at a disadvantage in global trade, a recent study has found.
The study by industry body Assocham observed that the high cost of logistics could hit India’s competitiveness.
“Shipping a container from India costs close to USD 1,200 while from China, it is in the range of USD 600 and Singapore about USD 400,” the Assocham study said, citing World Bank data.
Likewise, the turnaround time at India’s best port, JNPT in Mumbai that handles over 50 per cent of the country’s containers, is 1.1 days (36 hours) while it is less than 12 hours in Singapore, Dubai, Shanghai and Colombo.
“If we want to become an exporting nation with a strong manufacturing base, Indian logistics infrastructure be it ports, airports, roads or rail network, these must be of international class, built seamlessly through the entire system.
According to the study, India’s port handling charges are much higher while its logistics systems are under-performing compared to China, Thailand, South Korea, Malaysia and OECD (Organisation for Economic Co-operation and Development) countries.
Delay in transporting goods is a major irritant for businesses engaged in trade within India as well as those exporting abroad from the country. Presently, there are 177 inter-state checkposts and 268 toll plazas across national highways, leading to costly delays, the study said.
“Technological solutions like smart cards for toll payments and pre-paid state taxes through online mode 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,” it said.
Source : financialexpress.com