The commerce ministry will come out with a Logistics Performance Index (LPI) tomorrow, ranking states in terms of the logistical support they provide to promote trade, a senior government official said. “This will be a perception based ranking and it is the first time in the world that it is coming at the sub-national level,” the ministry official said. The index will act as a dynamic toll for the ministry to identify bottlenecks in this area. “We will be able to see why perception is negative for some states,” the official added. The World Bank has assisted the ministry in preparing the index. The ranking is based on about eight parameters such as transportation facilities available in states and documentation procedures. The ranking aims at encouraging states to work and improving upon their logistics related infrastructure. Inadequate infrastructure is impacting the country’s trade and investments. Logistics services such as customs and ports are central government matters but, “why they are functioning smoothly in certain states and not in other, the ranking would help us in understanding this also,” another official said. The issue would be discussed during the third meeting of the Council for Trade Development and Promotion on January 8.
Exporters body FIEO Director General Ajay Sahai has said that the logistics cost in India is very high and there is an urgent need to work on this parameter. High logistics costs make exports uncompetitive. Indian exporters have time and again demanded drastic cuts in railway freight rates to enhance price competitiveness in the global markets as costs of exports is currently very high in India. A Commerce Ministry strategy paper released in 2010 had emphasised the need to invest billions in improving infrastructure to boost exports. It had asked the government to invest in modernising roads, ports, railways, airports, power and customs stations. In India, the container transport mainly happens through roads due to various reasons like high railway freight rates, unreliable scheduling of freight trains and poor last-mile connectivity.
In the World Bank’s Logistics Performance Index (LPI), India’s ranking improved to 35th as against 54th spot it occupied in the previous report. The report came in 2016 as it comes once-in-two-years. Further, ministers from as many as 20 states are expected to participate in the meeting of the Council for Trade Development and Promotion. The official said that Goa Chief Minister Manohar Parrikar has confirmed his participation.
The issues which would come up in the meeting includes ways to improve exports and issues of exporters. Two books — LEADS (logistics ease access in different states) and statistics export booklet compendium of states data — will also be released on the occasion. The country’s merchandise exports during April-November 2017-18 increased by 12.01 per cent to USD 196.48 billion.