Logistics firm DHL Global Forwarding?s chief executive officer (Africa and South Asia Pacific) Amadou Diallo tells FE?s Praveen Kumar Singh that the company has kept India in the priority list for making new investments, but the country has to fine-tune its taxation system. Excerpts:
How much impact does global trade have on logistics sector?
The two are correlated. If a company wants to make use of opportunities outside its country, it has be aware of the regulations there and accordingly form marketing strategy. There are cases where a company does not want to have assets outside but still sell goods there. That is where we come in and provide a platform to enable them do it. The cost of operation and logistics can be negotiated in a way that it does not surpass the company?s estimate.
Are you involved in the negotiations for WTO agreement?
It is as difficult to get this agreement as it is to get the consensus at United Nations. But if we can trade goods in a less complicated manner, we will make goods much cheaper and at the same time create jobs in the emerging economies. We are involved in the negotiations independently at the corporate level since the beginning. We have advocated for a free flow of goods.
How are you positioned in the Indian market?
We are market leader in air freight, fifth largest in ocean freight, largest customs brokerage organisation and with Blue Dart we are the largest domestic express delivery service provider. We have 20,000 customer touch points in India.
How do you rate Indian market?
Today we have roughly around 50% of global trade that is taking place within Asia and between Asia and Africa. India plays an important role in that as it has a larger market than China in terms of increase in population on the existing base. The challenge is to fine-tune the taxation system. I know the Indian government is working on goods and services tax, but that is taking time to come by. The delay is understandable as the taxation policy of India is much more complex than in Africa or Europe.
Are you facing infrastructure constraints here?
We operate in over 220 countries. With our experience in other countries, I think India is doing pretty well in terms of infrastructure development. Good airport and seaport infrastructure are being developed. I think things are moving slow but with what is happening across the globe, I think you can move goods out of India much faster than any other country.
How do you read the fact that India is going to invest $1 trillion in infrastructure upgrade by 2017?
I think India is trying to cut short on what China has and it is normal to do so because it has a very large population. We have to uplift 400-500 million people from extreme poverty now. Infrastructure development is important for India as it creates jobs and provides a manufacturing platform. But it is important for the world too as it gives them a choice.
What are your investment plans in India?
So far we have invested half a billion dollar in India and our strategy for the future will be to invest more in India, China and Asia in general.
These are emerging markets and are going to be important in future. So you have to invest here if you want to sustain. But I can?t reveal those numbers as we are bound by the shareholder contract.