Supply Chain Logistics

India’s transportation and logistics sector is at an inflection point. By several estimates, this industry is expected to double to a $300 billion market in the next five years. India’s ecommerce boom coupled with a host of other Government of India (GOI) initiatives are additional catalysts. However, India’s logistics industry is dominated by the informal (“unorganized”) sector, accounting for 80 percent of its total logistics market. In other words, this sector is fragmented and inefficient, thereby performing below its potential. The GOI estimates that improvements in infrastructure and connectivity could reduce time to export by 5 days, with savings of $1 billion per annum to the Indian economy. Moreover, the industry’s transformation from informal to the formal (“organized”) sector will demand a similar transformation in supply chain performance. Gradual reforms to the supply chain will not only ease this transition, but also transform the speed and efficiency of trade and position India as a regional logistics hub.
The USIBC Supply Chain Logistics Committee engages with GOI officials on the most instrumental these policy changes, including efficient implementation of the Goods and Services Tax (GST), impetus from “Make in India,” and India’s rise on the World Bank’s Logistics Performance Index.

  • Enhancing the efficiency of India’s supply chain by supporting logistics providers will facilitate growth across all sectors of the Indian economy.
  • Modernize customs processes, specifically allowing for pre-arrival processing, clearance and release.
  • Encourage simpler rules on outsourcing and contracting out some functions in the chain to local vendors so as to improve customer service.
  • Advocate for the rapid implementation of the commitments undertaken as part of the WTO agreement on Trade Facilitation.
  • Raise the export limit threshold for commercial exports via courier mode from INR 25,000 to INR 5,000,000 to boost exports from India to facilitate exports for MSME’s and help them engage in cross border e-commerce.
  • Deployment of adequate customs officials and an increase in manpower at courier and cargo terminals would reduce customs clearance dwell time and allow 24×7 customs clearance at major airports (e.g. Bengaluru).
  • Use unified global norms to adjust existing de minimis regime for low value commercial shipments (courier) to encourage growth of cross border e-commerce and reduce customs administration cost. This would free up valuable resources for customs to focus on higher risk items.
  • Reduce commodity, weight and value restrictions for processing shipments in courier mode.
  • Recent customs improvements (e.g. single window clearance via cargo mode) should be expanded to courier clearance mode.
  • Make all national and state highway tolls FASTag accessible with more efficient posting of account credits/discounts.

Relating to Goods & Services Tax (GST)

  • Clarify and simplify regulations in the Goods and Services Tax bill on interstate movement of vehicles loaded with export-import goods.
  • Allow for zero-rate status on international transport (freight and courier) services (both exports and imports).
  • Unify treatment of rail containers and road containers under the same GST slab.
  • Allow an option for both Forward Charge Mechanism (FCM) and Reverse Charge Mechanism (RCM) to be available in the same GST network (GSTN).
  • Adopt logistics-friendly e-way bill rules under GST and consider feedback from the logistics sector in developing the rules.

Trade Facilitation Agreement

  • Roll out single window for courier clearances through the use of pilot programs, rigorous testing, and with minimal data elements.
  • Improved access of information (forms, duties, fees, valuation rules, restrictions, penalties, etc.), accessible and searchable online – as well through “push” notifications.
  • Reduce unnecessary or redundant documentation requirements through the use of pilot programs, private sector feedback, and voluntary roll out of reforms.
  • Standardization of processes regarding the development of new rules and regulations – to include the use pilot programs.
  • Strengthen risk-based targeting process to ensure that all government agencies deploy the highest standards and minimize physical inspections.

Civil Aviation

  • Address space/leasing concerns at airports.
  • Clarify FDI rules for cargo airlines.
  • Address regulations that prevent US aircraft operators from performing their own security functions (e.g. x-ray screening).

Jasjit Singh leads the U.S.-India Business Council’s Manufacturing & Infrastructure programs. Prior to joining USIBC, Jasjit was a Senior Advisor in the Obama Administration, the Executive Director of the Sikh American Legal Defense and Education Fund (SALDEF), and a Senior Consultant with Deloitte. He was selected to serve on the Secretary of Homeland Security’s Faith-Based Initiative as well as the Executive Committee for NCAPA, the largest Pan-Asian Advocacy Coalition.
Jasjit has provided written and oral testimony to the U.S. Congress and he has appeared on various media outlets and published Op-Eds for the New York Times, Politico, Washington Post, Huffington post, National Public Radio, and CBS Radio. His recent awards include The Asian Pacific American Institute of Congressional Studies (APAICS) Community Pioneer Award and University of Illinois Outstanding Asian American Alumni of the Year Award. Jasjit is a graduate of the University of Illinois, Urbana-Champaign College of Business. He is also a Truman National Security Fellow and an Asian American Journalists Association Media Institute Fellow.

Please contact Jasjit Singh for more information.

Sandip Samaddar is Head of Policy & Strategic Engagements for the USIBC GLP India team. In this role, he assists companies in understanding government policies and cross sectoral issues impacting their business. He works on strategic engagements and thought leadership projects, as well as engaging with the Government of India and state-level governments to advise various ministries on impediments to trade and investment.
Prior to USIBC GPL, Samaddar was Director (Americas) and head of the US/Canada, Latin America and Caribbean & Israel Division at the Federation of Indian Chambers of Commerce and Industry (FICCI), where he focused on leveraging FICCI’s overall presence in North and Latin America. He has previously worked as an independent trade consultant and entrepreneur, as well as a trade advisor with the German Technical Cooperation (GIZ) Agency to complete a specialized project – the Indo-German Export Project (IGEP).

Please contact Sandip Samaddar for more information.