India can boost exports by $5.5 bn by cutting trade costs: CII
New Delhi, Jan 19: Industry chamber CII on Thursday said that its recent survey reveals that reducing costs of trade through digitisation, inland infrastructure development and an efficient regulatory environment across four high-growth trade sectors can boost exports by 5-8 per cent.
"A first-of-its-kind study by Confederation of Indian Industry (CII) and Maersk reveals that reducing the costs of trade across four high-growth trade sectors by prioritising digitisation, inland infrastructure development, an efficient regulatory environment and developmental training, can boost exports by 5-8 per cent," CII said in a release here.
"A 10 per cent reduction can boost India's competitiveness and contribute additional revenues of up to $5.5 billion annually," it said.
"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," it added.
The survey findings revealed that while 54 per cent respondents ranked both regulatory documentation and terminal handling as serious challenges, between 51-60 per cent of them considered inland transportation a serious challenge.
"While we need timely and cost-effective transportation to support trade expansion along with a robust policy, it is also critical to address challenges like inadequate inland infrastructure and indirect and hidden costs", Rajeev Sinha, Co-Chair, CII National Committee on Ports and Shipping, said.
Noting that outlook for global trade in 2017 remains weak, the report said India has the opportunity to improve its share of global trade and be the only country to deliver nearly double-digit growth in container trade this year. "Reducing costs by a fourth can substantially boost exports in just these sectors," Maersk Line MD Franck Dedenis said.
"APM Terminals (India's largest container terminal) in Nhava Sheva (India's largest container port, near Mumbai) has consistently increased its container throughout and productivity since 2006 and as a result has improved India's liner shipping connectivity delivering an additional 9 per cent in trade for the country since," said Maersk Senior Director (South Asia) Julian Bevis.
Meanwhile, signalling a definitive reversal of the continuous decline in Indian merchandise exports through most of last year, official data last week showed these grew for the fourth month in a row at $23.89 billion in December 2016, an uptick of an impressive 5.72 per cent over the $22.59 billion in December 2015.