As India’s cities grow and e-commerce continues to increase, India has a need for advanced logistical services and transportation infrastructure. India’s GDP is conservatively expected to grow at 6%-7% per year over the next five years. Logistics growth is typically 1.5-2.0 times GDP growth and increased infrastructure investment has the clear potential this projection even higher.

The Indian Government believes that the country needs $1 trillion for developing new roads, ports, and airports over the next few years; especially given India is Asia’s third largest economy and that building and upgrading India’s transport infrastructure will add 2% to GDP growth. The Indian Railways alone envisage spending $142 billion in the next five years to modernize the system.

The Council’s Transportation & Logistics Executive Committee is committed to working in concert with Indian and U.S. policymakers to realize the full potential of Asia’s third largest economy. To this extent, the Committee is dedicated to strengthen India’s transportation infrastructure – railways, road and highways, ports and shipping, civil aviation – to enable logistical companies to discharge their functions more efficiently.

Transportation Infrastructure

  • Advocate for early establishment and operationalization of the “Railway Development Authority” to ensure a level playing field for private investors.
  • Encourage the establishment of a dedicated PPP implementation structure and facilitation mechanism for private sector, including an independent dispute resolution body.
  • Introduce single window clearances for smooth bureaucratic procedures, improve decisiveness, including fast tracking approvals processes and reduce the need for multiple approvals.
  • Foster the development of a long-term debt market in India, one with enough depth to be able to finance capital-intensive infrastructure projects.
  • Streamline clearance and permitting processes for infrastructure projects, specifically related to land acquisition; encourage land acquisition before inviting bids.

Logistics

  • Modernize customs regulations, specifically making electronic clearances available to logistics companies.
  • Simplify “Know Your Customer” regulations for foreign visitors in India. Advocate for the ratification and implementation of the commitments undertaken as part of the WTO agreement on Trade Facilitation.
  • Clarify and simplify regulations in the Goods and Services Tax bill on interstate movement of vehicles loaded with export-import goods.
  • Encourage simpler rules on outsourcing and contracting out some functions in the chain to improve customer service.

For more information, please contact Hemal Shah at Hshah@usibc.com