Logistical Bottlenecks in India: Government Interventions & Policy Initiatives

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1 Logistical Bottlenecks in India: Government Interventions & Policy Initiatives Dr. Ram Singh Assistant Professor International Trade Operations & Logistics Indian Institute of Foreign Trade New Delhi Interactions with Stakeholders on Fresh Produce India conclave at Hotel Sangri La; New Delhi as on 3 rd March; 2011

2 Wastages in Fresh Produce In India o According to IPA; absolute loss from wastage of fresh produce in India is around billion $ in India is the second largest producer of Fresh Produce in world and Fresh Produce is growing around 5-8%; far faster then the combined agriculture growth of country.

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5 Logistical Bottlenecks in India

6 Trading Across Borders Indicator China India Brazil Trading Across Borders Documents to export (no.) Time to export (days) Cost to export (US$ per container) Documents to import (no.) Time to import (days) Cost to import (US $ per container) South Africa Indonesia Pakistan Srilanka , ,

7 India s Logistics Performance Index Source: Author Constructions based on LPI 2010

8 Government Interventions & Policy Initiatives in Logistics Infrastructure in India

9 Policy Initiatives for Road Sector Sector Deficit Eleventh plan Targets FDI Envisaged Investment Size Road / Highways Roads / highways 65,590 km of existing national highways: 6-lane 6,500 km in GQ 4-lane 6,736 km NS-EW 100 % FDI under automatic route US$ 78.5bn Comprise only 2% of network Carry 40% of traffic Of which 12% is 4-laned; 50% is 2- laned; and 38% is single laned 4-lane 20,000 km 2-lane 20,000 km 1,000 km expressway

10 Policy Initiatives for Port Sector Sector Deficit Eleventh plan Targets FDI Envisaged Investment Size Ports Inadequacy of Berths Rail / road connectivity New capacity: 485 million MT in major ports 345 million MT in minor ports 100 % FDI under automatic route US$ 22 bn

11 Policy Initiatives for Air Port Sector Sector Deficit Eleventh plan Targets FDI Envisaged Investment Size Airports Inadequacy of Runways handling capacity Aircraft Parking space and terminal buildings Modernize 4 metro and 35 non-metro airports 3Greenfield in North Eastern Region (NER) 7 other Greenfield airports 100% FDI for existing airports (FIPB approval for FDI beyond 74%) 100% FDI under automatic route for Greenfield airports 49% FDI is permissible in domestic airlines under the automatic route, but not by foreign airline companies US$ 7.74 bn

12 Policy Initiatives for Railways Sector Deficit Eleventh plan Targets FDI Envisaged Investment Size Railways Old technology Saturated routes Slow speeds (freight: avg 22kmph; passengers: avg 50kmph) Low payload to tare ratio (2.5) 8132 km new rail 7148 km gauge conversion Modernize 22 stations Dedicated freight corridors 100% FDI permitte d in railway infrastru cture under automati c routes US$ bn

13 Policy Initiatives for Warehousing Sector

14 o Agri Export Zones o Contract Farming o Food Park Scheme o Supply Cold Chain o Modern Auction Centres o Agri Marketing Reforms Irradiation facilities and value added centers

15 Government Initiatives: Success Story of Fresh Produce (Ginger) Organic ginger of Karbi Anglong; North East India Formation of Gin-Fed with objectives of: To bring all ginger growers of the district under one umbrella; To avoid distress sale of ginger; To link the growers directly to the market ( Rail Wagon to Delhi/ Kolkata) in order to enhance their profitability; To ensure more income by value addition (cleaning, grading, waxing, dehydration and packaging) To find out various avenues for marketing ginger; To uplift the economic condition of ginger growers by linking credit facilities (bank loan) as seed capital through banks by means of the G-Card; and To introduce the participation of national and international markets.

16 I DID NOT PUT ENOUGH OIL IN MY FLICKERING LAMPS, WHY BLAME THE WIND?

17 Thank You