TIES inevitable in boosting India’s export competitiveness: PHD Chamber

Improvement in India’s logistics cost would be crucial to enhance its trade facilitation measures, improve its competitiveness in international markets and a significant boost to economic growth, said Mr. Anil Khaitan, President, PHD Chamber of Commerce and Industry.

Improvement in logistics hold huge significance as every 1 percentage point reduction would add USD 10 billion in the GDP of the country, said Mr. Anil Khaitan.

Indian exports lose their competitiveness due to their huge logistics costs. Logistics costs comprise of 14% of GDP in India while in EU 10% and in the USA 8%, said Mr. Anil Khaitan.

India’s score on trading across border parameter has improved from 57.6 in 2017 to 58.5 in 2018. However, the cost to export and import due to documentary compliances, excluding the insurance cost and informal payments, remained the same at USD 91.9 and USD 134.8, respectively, said Mr. Anil Khaitan.

India should work towards reducing trade costs by providing highly effective and connected transport services, port facilities, communications, energy, financial services and business legislations, added Mr. Anil Khaitan.

Robust infrastructure segment is a vital ingredient in rising export performance. Infrastructure is a major sector that propels overall development of the Indian economy. In order to maintain a high growth trajectory of exports, we require state-of- the art infrastructure, said Mr. Anil Khaitan.

Enhancing the efficiency of projects under Trade Infrastructure for Export Scheme (TIES) is crucial for up scaling export growth and competitiveness, which will push India’s export performance in a highly competitive world, he added.

I believe the TIES should de-centralise decision making to state governments to facilitate more and more investments in infrastructure and enhance exports, he added.

Going ahead, it is imperative for officials to streamline the project processing mechanism under TIES and ensure time bound completion of the same, said Mr. Anil Khaitan.

We should improve our infrastructure by encouraging more and more Public-Partnership Projects (PPP) for infrastructure, which is built rapidly and is of utmost quality, said Mr. Anil Khaitan.

The value of PPP projects have declined from INR 53,248 crore in 2011-12 to INR 12,400 crore in 2016-17 whereas number of projects declined from 52 to 9 during the same period, he added.

We should work hard to reduce trade costs with our major trading partners like we have done with the UAE. India’s total trade cost with UAE has reduced from 103% in 2005 to 56% in 2014, said Mr. Anil Khaitan.

To enable a speedy mechanism, focus should be on decentralizing the decision making to state governments and thereby, facilitating more and more investments in infrastructure and enhance exports, said Mr. Anil Khaitan.

The states should be encouraged to nominate projects encompassing development of minor ports, and regional airfields for the Trade Infrastructure for Export Scheme (TIES) scheme for enhanced regional connectivity and thereby increased reduction in costs of logistics to facilitate exports, said Mr. Anil Khaitan.

I believe that TIES is in fact just the right scheme to achieve this with the help of a collaborative and calibrative approach for creating focused export infrastructure and first mile and last mile connectivity, said Mr. Anil Khaitan.