India: Improve ports, logistics to boost exports says World Bank Back to News & Events List


India must frame policies to reduce farm subsidies and cut import tariffs on cars and take steps to improve ports and logistics, to emerge as an export powerhouse, according to the World Bank.

The Bank on Wednesday released a report titled ‘South Asia’s Turn: Policies to Boost Competitiveness and Create the Next Export Powerhouse’ and suggested a set of policy actions in four sectors — agribusiness, apparel, electronics and automotive.

With the right set of productivity-enhancing policies, South Asia, led by India, could more than triple its share in global markets of electronics and motor vehicles and come close to doubling its already significant market share in wearing apparel (excluding textiles and leather) by 2030.

In the farm sector, passive and non-targeted subsidies (e.g. water, fertilisers and minimum support price) have encouraged farmers to continue to produce low value crops using low productivity and unsustainable techniques while restrictions on agricultural markets have constrained productive private investments in higher value food products.

In order to enhance the business environment in the sector, the government needs to bring out reforms including reducing subsidies and promoting competition, according to the Wrold Bank.

Denis Medvedev, lead economist (innovation & entrepreneurship), World Bank Group, said the government needs to better target subsidies so that only the poor farmers are benefited, adding that passive and non-targeted subsidies are not encouraging farmers to adopt new technologies and (seed) varieties.

The government should also consider gradually reducing tariffs on final cars, as the prevailing high import tariffs on the completely built units are slowing down diffusion of good practices.

“The spread of good managerial practices has slowed down by high level of protection on final cars,” it said.

Electronics sector
The electronics sector, according to the Bank, faced constraints such as underdeveloped clusters and poor trade logistics, while the apparel sector is facing difficulties to import man-made fibre, preventing upgrading and diversification.

To become a significant player in electronics, “India needs to facilitate the development of clusters (reducing transaction costs and facilitating access to large pools of skilled labour and services) and improve its trade logistics to enable the seamless import and export of hundreds of components.”

India needs to reform the duty drawback scheme to facilitate the import of fabrics for exports.

“The current system imposes delays that are unacceptable to global buyers, cutting Indian exporters from the increasingly important manmade fibre segment,” according to the report.

India remains behind on ‘global value chain’ capabilities including physical capital, human capital, institutions and logistics, it said.

Original Source: hellenicshippingnews.com


Recent News


25

11/2017
India-Taiwan bilateral trade to touch $6 billion in 2017

India-Taiwan bilateral trade is set to touch $6 billion by end of 2017, Taiwan External Trade Development Council (TAITRA) Chairman James C F Huang said here on Thursday. ...

24

11/2017
MMTC to import 2,000 tonnes onion to check prices: Ram Vilas Paswan

State-run MMTCBSE -1.01 % will import 2,000 tonnes of onion, while Nafed and SFAC will buy 12,000 tonnes locally in order to boost supplies and check prices, Food and Consumer ...

23

11/2017
India's food processing sector may attract $33 bn by 2024: Assocham survey

India's food processing sector has the potential to attract $33 billion investment by 2024, according to a study released here on Monday.   The country's...

22

11/2017
Paswan extends date for displaying changes in MRP due to GST to Dec 31

Considering the requests received by the ministry of consumer affairs, food and public distribution to extend the permission for some more time, Ram Vilas Paswan, the minister ...