Improvements in India's Logistics Ecosystem
India has made significant strides in enhancing its logistics sector through improvements in port infrastructure, better multimodal connectivity, digital integration, and a focus on trade facilitation. This is reflected in India's jump to the 38th position globally on the World Bank’s Logistics Performance Index 2023.
Influential Initiatives
- PM Gati Shakti and the Unified Logistics Interface Platform have played a crucial role in this improvement.
- The National Time Release Study (NTRS) 2025, conducted by the Central Board of Indirect Taxes and Customs, provides detailed data on the clearance times for import and export cargo at Indian ports.
Trade Facilitation Reforms
- Reforms such as digitisation, pre-arrival processing, and the Authorised Economic Operator (AEO) program have reduced average release times (ARTs).
- Seaports and air-cargo complexes (ACCs) have seen significant reductions in ARTs, while inland container depots (ICDs) have shown marginal improvements.
- Integrated Check Posts (ICPs) excel with nearly 93% of imports cleared within the 48-hour benchmark set by the National Trade Facilitation Action Plan (NTFAP).
Challenges in Export Clearance
The ART for exports remains mixed; ACCs and ICPs are generally meeting clearance targets, but seaports and ICDs lag behind, impacting outbound trade volume.
Factors Affecting Performance
- Delays are often due to duty payment issues, frequent amendments to shipping and entry documents, and inefficient query resolution.
- Post-regulatory logistics, especially after Customs clearance, present bottlenecks, particularly at ICDs.
- The presence of partner government agencies (PGA) further slows clearances, with Kolkata port showing the highest import clearance time due to various delays.
Successful Examples and Areas for Improvement
- Mundra port stands out with an average release time of just 55 hours, showcasing effective container handling and facilitation.
- Logistics costs in India are 14-18% of GDP, much higher than the global benchmark of 8%, indicating the need for further reforms.
- Suggested improvements include port gate automation, reduced manual documentation, faster post-clearance logistics, and better adoption of digital platforms by traders.
For India to establish itself as a reliable export hub and an attractive destination for global manufacturing, these operational challenges must be addressed urgently.
