India’s exports will be “seriously jeopardised” unless the government addressed infrastructural bottlenecks faced by exporters in the next five years, the Commerce Secretary, Mr Rahul Khullar today said.
Speaking on Agricultural and Processed Food Products Export Development Authority’s award function here, he said problems such as transportation and freight costs and poor handling capacities may adversely impact India’s exports.
”If we don’t attend to the problems in infrastructure in the next five years, our entire export effort is going to be seriously jeopardised,” Mr Khullar said.
According to the Commerce Ministry, the average cost to move a container within India is $945, more than double of China’s $460, Malaysia’s $450 and Vietnam’s $625.
Also, the average freight revenue per-tonne kilometre is $395 in India, compared to $185 in China, $281 in South Africa and $100 in the US.
He said while other problems also plague the agricultural exporters, but those are in the nature of generic constraints to all exporters.
“Be they freight cost, transport cost, poor handling capacites...the government has to address in a much larger context and these are critical constraints for all exporters,” he said.
Recently, the government has announced few steps to reduce transactions cost of exports. On an average, the quantum of transaction cost is about 7-10 per cent of total value of Indian exports, which amounts to $15 billion annually.
Commenting on the problems that agricultural exporters may face in the coming years, the secretary said that non-trade barriers such as sanitary and phyto-sanitary (SPS) measures and traceability issues could impact agri exports.
“As tariffs come down or traditional barriers such as taxes on trade are dismantled, we are going to find non—tariff barriers in the form of either SPS measures which will block the access...the second issue which is traceability,” he said.
SPS measures are used for food safety in terms of animal and plant health. Traceability is the ability to trace the history, application, or location of any entity by means of recorded identifications.