The government needs to move fast on creating an integrated digital platform that links all trade stakeholders and helps in significantly cutting down crucial time and expense for trade logistics, a research paper by economist Bibek Debroy and NITI Aayog official Kishore Desai has suggested.
Debroy, who is the Chief of the newly set-up “Economic Advisory Council to the Prime Minister (EAC-PM) has also called for trade facilitation to be prioritised and an integrated logistics policy to be put forward by the government.
At present, different stakeholders in trade use different digital platforms systems. While an exporter will need to register and operate through the ICEGATE or SWIFT platforms for customs purposes, he will also often be using digital platforms such as Visual Impex, the paper points out. On the other hand, the trade and taxation authorities themselves use a variety of software at loggerheads with the other.
Most of these platforms do not have interfaces and data exchange protocols with each other. As a result, each stakeholder continues to use its own platform forcing trade to not only access multiple windows but also multiple exchanges of documents. This reflects in the country's dismal ranking of 146 in the Trading Across Borders indicator of the World Bank's latest 2017 Doing Business Report, the paper says.
While the Centre has recently moved forward in this regard by setting up a National Committee on Trade Facilitation under the chairmanship of the Cabinet Secretary as well as inaugurating a separate division for logistics within the Commerce Ministry, the government now wants states to also pick up the pace, a senior Commerce Ministry official said.
Case in point, earlier this week, the new Logistics Ease Across Different States (LEADS) index developed by the Commerce and Industry Ministry and Deloitte was launched. It ranks states in terms of the logistical support they provided to promote goods trade.
The ranking is based on parameters such as the competitiveness of pricing, timeliness and availability of infrastructure and that of services, among others. It aims to encourage states to provide the policy push towards improving their logistics-related infrastructure.
Commerce and Industry Minister Suresh Prabhu had said the logistics segment was a crucial yet weak part of India’s export chain. “The commerce ministry is looking at logistics as a separate subject. We need to identify the cost of logistics. This includes the turnaround time at ports, cost of power and the time it takes for goods to reach their destination,” Prabhu said on Monday.
At the third meeting of the Council for Trade Development and Promotion — a meet of trade ministers from all states with the Centre — the ministry has suggested that states look into these issues and remove red tape and inefficiencies. A senior commerce ministry official said discussions with the ministry of road transport and highways and ministry of shipping have been held on the issue and more meetings are expected over the next few weeks.
On the global front, India's position in the annual World Bank’s Logistics Performance Index had improved to 35 in 2016, the last time the report was published. This was a jump from the 54th spot India had occupied in the previous report.