Indian Logistics Focus on Infrastructure Creation to Sustain and Drive Growth
Total Page：16
File Type：pdf, Size：1020Kb
Indian Logistics Focus on infrastructure creation to sustain and drive growth For private circulation only February 2014 www.deloitte.com/in 2 Contents About Deloitte 3 About ICC 4 Indian Logistics 5 Overview 5 Roads 7 Railways 10 Air Cargo 13 Ports 15 Conclusion 18 About Deloitte Deloitte drives progress. We advance the aims of our description of the legal structure of Deloitte Touche clients and their stakeholders, striving to make them Tohmatsu Limited and its member firms. leaders wherever they choose to compete. We focus on making a tangible positive difference by combining Deloitte provides audit, tax, consulting, and financial strategy with action and delivering measurable impact. advisory services to public and private clients spanning We form unique collaborations to find smarter insights, multiple industries. With a globally connected network innovative solutions and entrepreneurial ways to move of member firms in more than 150 countries, Deloitte ahead. We invest in outstanding people of diverse brings world-class capabilities and high-quality service talents and backgrounds and empower them to achieve to clients, delivering the insights they need to address more than they could elsewhere. We believe that when their most complex business challenges. Deloitte has in our clients succeed, and when society succeeds, so do the region of 200,000 professionals, all committed to we. becoming the standard of excellence. Deloitte refers to one or more of Deloitte Touche In India, Deloitte is spread across 13 locations and over Tohmatsu Limited, a UK private company limited by 20,000 professionals take pride in their ability to deliver guarantee, and its network of member firms, each of to clients the right combination of local insight and which is a legally separate and independent entity. international expertise. Please see www.deloitte.com/about for a detailed Europe 297 oces in 47 countries Key Oces: London, Frankfurt, Paris, Rome, Dusseldorf, Madrid, Moscow, Prague Asia Pacific 113 oces in 26 countries Key Oces: Pakistan, Bangladesh, Sri Lanka, North America Singapore, Thailand, 131 oces 2 Vietnam, Indonesia countries Key Oces: New York, San Francisco, Los Angeles, Denver, Toronto, Montreal South America India 69 oces in 28 countries 20000 Professionals Key Oces: Sao Paulo, 13 oces Mexico City, Buenos Aires, Key Oces: Mumbai, Santiago, Caracas Delhi, Hyderabad, Africa & Middle East Bangalore 46 oces in 35 countries Key Oces: Johannesburg, Cape Town, Kenya, Tel Aviv 4 About ICC Founded in 1925, Indian Chamber of Commerce (ICC) The Indian Chamber of Commerce headquartered in is the leading and only National Chamber of Commerce Kolkata, over the last few years has truly emerged as a operating from Kolkata, and one of the most pro-active national Chamber of repute, with full-fledged offices and forward-looking Chambers in the country today. in New Delhi, Guwahati, Patna, Bhubaneshwar and Its membership spans some of the most prominent Ranchi functioning efficiently, and building meaningful and major industrial groups in India. ICC is the founder synergies among Industry and Government by member of FICCI, the apex body of business and addressing strategic issues of national significance. industry in India. ICC’s forte is its ability to anticipate the needs of the future, respond to challenges, and Indian Chamber of Commerce, New Delhi Office prepare the stakeholders in the economy to benefit from D -118, Ashirwad Complex these changes and opportunities. Set up by a group of Green Park Main pioneering industrialists led by Mr G D Birla, the Indian New Delhi - 110 016 Chamber of Commerce was closely associated with Ph: 011 46101431-38 the Indian Freedom Movement, as the first organised Fax: 011 4610 1440/1441 voice of indigenous Indian Industry. Several of the Email: [email protected] distinguished industry leaders in India, such as Mr B M Birla, Sir Ardeshir Dalal, Sir Badridas Goenka, Mr S Indian Chamber of Commerce, Head Office P Jain, Lala Karam Chand Thapar, Mr Russi Mody, Mr 4 India Exchange Place, Kolkata 700 001 Ashok Jain, Mr.Sanjiv Goenka, have led the ICC as its Phone: 033-22303242 President. Currently, Mr. Shrivardhan Goenka is leading Fax: 033 2231 3380, 3377 the Chamber as it's President. Email: [email protected] Website: www.indianchamber.net ICC is the only Chamber from India to win the first prize in World Chambers Competition in Quebec, Canada. Indian Chamber of Commerce, Bhubaneswar Office 32-East Ashok Nagar, Bhubaneswar, Orissa ICC’s North-East Initiative has gained a new momentum Phone: 91-674-2532744 and dynamism over the last few years, and the Chamber Email: [email protected] has been hugely successful in spreading awareness about the great economic potential of the North-East Indian Chamber of Commerce, Guwahati Office at national and international levels. Trade & Investment House No.209, 2nd Floor shows on North-East in countries like Singapore, Opp. Overtnite Express Thailand and Vietnam have created new vistas of Near AIDC, R.G.Barua Road, Guwahati - 24 economic co-operation between the North-East of Ph: 0361 2460216 / 2464767 India and South-East Asia. ICC has a special focus Fax: 0361 2461763 upon India’s trade & commerce relations with South & Email: [email protected] South-East Asian nations, in sync with India’s ‘Look East’ Policy, and has played a key role in building synergies Indian Chamber of Commerce, Bihar Office between India and her Asian neighbours like Singapore, 11/B, Dumri House, Indonesia, Bangladesh, and Bhutan through Trade & Kavi Raman Path, East Boring Road, Business Delegation Exchanges, and large Investment Patna – 800001, BIHAR. Summits. Tele Fax No. - +91-612-2533636 E mail id - [email protected] ICC also has a very strong focus upon Economic Research & Policy issues - it regularly undertakes Indian Chamber of Commerce Macro-economic Surveys/Studies, prepares State 181 – C; ROAD NO. – 4 Investment Climate Reports and Sector Reports, provides ASHOK NAGAR necessary Policy Inputs & Budget Recommendations to RANCHI – 834002, Jharkhand. Governments at State & Central levels. Tel : +91-651-2243236 Fax : +91-651-2243236 Indian Logistics Focus on infrastructure creation to sustain and drive growth 5 Indian Logistics Overview For any economy, the logistics sector, encompassing India’s need for infrastructure creation in the logistics transportation, warehousing, cargo consolidation and sector is striking. In just a decade India has seen its border clearances, would form the backbone of its 1 GDP at 2005 $, World economic size more than double to $ 1.37 trillion trade, and associated economic activity and growth Development Indicators, World Bank (2012)1 and total foreign merchandise trade multiply of key sectors. The cost of trading whether by sea, 2 from 20% of GDP (2000) to 42% of GDP (2012)2. This land or air forms a critical component of the final Current US$ terms, World Development Indicators, World growth has been accompanied with a phenomenal price of a commodity. An efficient logistics system Bank rise in the volume of freight traffic movement over the reduces this cost, providing a competitive edge and 3 The LPI index scores period. However, logistics infrastructure and services propelling economic activity. As per a McKinsey study, 155 countries on six main in the country have arguably not developed at the inefficiencies in logistics infrastructure cost the Indian parameters on a scale of 1 (worst) to 5 (best) every two same pace to support and further this growth. Going economy an extra $45 billion, about 4.3% of the GDP, years. These criteria include: by global standards, the Indian logistics sector is every year. It warns that a 2.5 times growth in freight a) efficiency of the clearance process (speed, simplicity, and characterized by concerns around higher costs, lower traffic demand by 2020 (compared with 2010 levels) will predictability of formalities) profitability, lack of adequate availability of trained put further stress on India’s infrastructure4. by border control agencies, including customs); b) quality manpower resources and lower adoption of technology of trade- and transport- in its processes. However, such high demand prospects also present an related infrastructure (ports, railroads, roads, information opportunity for logistics industry players in India. The technology); c) ease of These concerns are also reflected in the drop in India’s Emerging Market Survey, 2013, conducted by Transport arranging competitively priced shipments d) competence and rank on World Bank’s Logistics Performance Index (LPI)3, Intelligence (Ti) ranks India as the second most attractive quality of logistics services which measures a country’s performance on six key logistics market in the future after China, and its position (transport operators, customs brokers); e) ability to track criteria. Over the past five years, the country’s LPI rank has not changed over the past four years5. As a fast and trace consignments and has fallen from 37 (2007) to 46 (2012) as its score has growing economy with one of the largest consumer f) The frequency with which shipments reach the consignee stagnated over the period while competing countries markets, industries such as automobile, pharmaceuticals, within the scheduled or have improved on the same. India lags behind other FMCG and retail will drive the demand for logistics in expected delivery time. major markets such as Brazil (41), China (26), US (9), India in the future. Further impetus will