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
Email: ramsingh@iift.ac.in
Interactions with Stakeholders on Fresh Produce India conclave at Hotel Sangri La; New Delhi as on 3rd March; 2011

2. Wastages in Fresh
Produce In India
o According to IPA; absolute loss from wastage of fresh produce in India is around 13-14 billion $ in 2009-10.
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.

3. Country / Logistics Share of Size of the Share of Logistics Industry
Region Costs as % Organized Logistics Industry in global Industry
of GDP Logistics ( $ Billion)
India 12-14% 3-4% 145-160 2-3 %
China 18% Less Than 10% 800-950 NA
USA 9.9% 34% 1200-1400 NA
Europe 7.1% 54% 1100-1300 NA
Growth Of Logistics Industry In India
CAGR (2006‒2010)
India s Total Logistics Market 10 ‒ 12 %
Organized Logistics Outsourcing Market 25%
Unorganized Logistics Market 9 ‒ 11 %
3 PL 35 %
.Mainly because of increased pressure on gateways.

4. Constituents of Total Logistics Cost India
Transportation 35%
Warehouse & Handling 9%
Inventory 25%
Packaging 11%
Customers & Shopping 6%
Transit Losses 14%
Technology cost <1%
Substantial opportunity to save on Transportation and in-transit
losses with the adoption of suitable Technology.

5. Logistical
Bottlenecks in India

6. Trading Across Borders
South
Indicator China India Brazil Indonesia Pakistan Srilanka
Africa
Trading Across
50 100 114 149 47 81 72
Borders
Documents to
7 8 8 8 5 9 8
export (no.)
Time to export
21 17 13 30 20 21 21
(days)
Cost to export (US$
500 1,055 1790 1531 704 611 715
per container)
Documents to
5 9 7 9 6 8 6
import (no.)
Time to import
24 20 17 35 27 18 19
(days)
Cost to import (US
545 1,025 1730 1807 660 680 745
$ per container)

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

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

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

12. Policy Initiatives for
Railways
Sector Deficit Eleventh plan FDI Envisaged Investment
Targets Size
Railways  Old  8132 km new rail 100% US$ 65.45 bn
technology  7148 km gauge FDI
 Saturated conversion permitte
routes  Modernize 22 d in
 Slow speeds stations
railway
(freight: avg  Dedicated freight infrastru
22kmph; cture
corridors
passengers: avg under
50kmph) automati
 Low payload
c routes
to tare ratio
(2.5)

13. Policy Initiatives for
Warehousing Sector
Entitlement of Units Facilities available in a FTWZ NFE criteria
a. Income Tax a. Customized categorized Units in FTWZs shall
exemption as per 80 warehouses e.g. Chemicals, be net foreign
IA of the Income Tax food, electronics, oil, etc. exchange earners.
Act. b. Sophisticated freezer / cooler Net foreign
b. Exemption from facilities exchange earning
Service Tax. c. Break bulk, containerized, and shall be calculated
c. Free foreign dry cargo storage facilities cumulatively for
exchange currency d. Controlled humidity every block of five
transactions would be warehouses years from the
permitted. e. Enhanced transportation commencement of
d. Other benefits mutatis facilities warehousing and/
mutandi as applicable f. World-class information or trading
to units in SEZs. system for cargo tracking etc. operations as per
g. Office space formula. Applicable
Support facilities and amenities like for SEZ units.
medical facility, canteen services,
and business centers.

14. Strengthening Vital Elements of
Agri-Logistics
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