Logistics reforms: Move goods like a horse to trade like a tiger

India must continue to improve its logistical infrastructure to fulfil its aspiration of becoming a global trading powerhouse

- MONIL SHARMA

India's merchandise exports grew by a significant 39% from $317.5 billion in 2014 to $441.7 billion in 2024. This rise in exports testifies to India's ambition of positioning itself as a global manufacturing and export powerhouse. Flagship government schemes, such as production-linked incentives (PLI), Make in India and the Phased Manufacturing Programme have played a vital role in India's export thrust.

The 'trading across borders' indicator from the World Bank's 2020 Doing Business data-set showed that exporting from India took significant time and money. On average, border procedures alone took 52 hours and $212 per container. Export documentation consumed 12 hours and $58. Importing took even more—with around 65 hours and $266 needed for border clearance, and 20 hours and $100 for documentation. In comparison, China was processing the same export shipments within 21 hours at a slightly higher cost of $256 per container. It processed documents faster too, in 9 hours on average, although the documentation cost is $74, slightly higher than in India.

India was better placed than the likes of Bangladesh and Vietnam, but behind countries like South Korea, which was the world leader on those counts. South Korea was doing border checks in just 13 hours at a cost of $185, and document processing in 1 hour for only $11. All these numbers showed the gap India needed to cover in competition with the world's best export performers. While Doing Business data is old and the World Bank has discontinued this study, its broad 2020 rankings may not have changed very much (except in Vietnam's case perhaps).