Issue 17 | November 2019

In Focus

India: A global trade gateway, at a time of worldwide flux

image

India’s goal of becoming a USD 5 trillion economy is likely to be achieved with a robust foreign trade policy. Experts argue that enhanced and more efficient exports and imports, backed by a stress-free logistics backbone will drive the economy’s growth. Some even argue a WTO-like system will help drive economic growth, increase per capita income and help the country leverage its demographic advantage.

With the two largest economies The United States and China, clashing repeatedly over trade differences, the world is feeling the aftershocks. Free trade agreements are being recast, new opportunities - and locations - to do business are emerging and the old playbook for global trade thrown out of the window. In these uncertain times, there is an opportunity for India, with its ambitious plans of becoming a USD 5 trillion economy by 2025, to play a pivotal role in this new world order.

To reach this imposing target, trade experts say that India needs to grow at least 8% for a couple of years—a feat few countries have previously managed. To achieve this lofty goal, the government needs to improve logistics, ease of doing business and modernise its trade infrastructure. Already, the government is reviewing its free trade agreements - 42 according to one estimate from ADB - and is set to catalyse export growth by refining them.

Growth in Exim trade

According to an estimate from Federation of Indian Export Organisations (FIEO), these measures will push India’s exports beyond the USD 1 trillion mark in the next three years. Government leaders including Union Commerce Minister Piyush Goyal, believe that exports need to grow at 19-20% annually to achieve this stiff target.

There are plenty of opportunities for India to ramp up its exports. The Confederation of Indian Industry (CII), for instance, has recently identified 31 sectors with high export potential, including women’s apparel, drugs, cyclic hydrocarbons and furniture. In 2018-19, India’s exports increased 9% to hit a new high of USD 331 billion, crossing the previous high of USD 314 billion back in 2013-14.

Experts argue that enhanced and more efficient exports and imports, backed by a stress-free logistics backbone will drive the economy’s growth.

Logistics, the key growth driver

With an improvement in logistics and its convenient location, India is ideally placed to facilitate imports and exports from around the world. Over the past six decades, the country has evolved from a system of self-reliance and import substitution to becoming a truly liberalised economy. It stands third in purchasing power parity in the world making it one of the largest importers of goods and services.

India's top exports are engineering goods, petroleum products, gems and jewellery, agriculture products and textiles and it is a major exporter of information technology and business outsourcing services. India’s major imports are petroleum products, gold and silver, electronic goods and precious stones.

India’s government recently unveiled its National Logistics Policy. The blueprint pieced together after consultations with four key ministries—railways, road transport and highways, shipping and civil aviation—as well as 46 partnering government agencies is reshaping the way India trades. It aims to optimise the current modal mix (road-60%, rail-31%, waterways-9%) to bring them at par with international benchmarks (road-25-30%, railways-50-55%, waterways-20-25%). To back this up, it has planned massive spends on public infrastructure including INR 10 lakh crore on roads under the Bharatmala project and INR 8 lakh crore under the Sagarmala programme.

As India expands and improves its logistics infrastructure, it is bound to grow rapidly. According to estimates from CARE Ratings, the country's logistics industry is forecast to grow at a CAGR of 10% from USD 160 billion to USD 215 billion by 2020-21. Investments in logistics from sectors as diverse as manufacturing, retail and e-commerce and improvement in infrastructure, ranging from dedicated freight corridors to logistics parks and free trade warehousing zones, will all drive growth, the rating agency contends.

Grow with Allcargo

Allcargo Logistics’ NVOCC services make it an ideal partner to catalyse this foreign trade growth. With a global network of more than 300 owned offices in over 160 countries, Allcargo is the global leader in LCL consolidation. This, backed by hassle-free cargo transportation across 2400+ trade lanes, diversified services and customs clearance solutions, adds to the strengths of its NVOCC division. A pan-India network of offices and own Container Freight Stations (CFS) and Inland Container Depots (ICD), enable Allcargo to provide end-to-end solutions to customers.

“India’s growing importance as a hub of international trade has made it vital for the logistics industry to keep pace and meet international standards. As the global LCL consolidation leader, we are in the perfect position to offer world-class NVOCC services to businesses that want to leverage the potential of India’s strategic location. And our wide range of land-side logistics services like contract logistics, logistics parks, projects and engineering only add to the advantage by enabling us to offer end-to-end logistics services to our customers,” said Mr. Hareram TS, Senior Vice President, Allcargo Logistics.

In India, the NVOCC team is present in all major cities. Together they create a formidable network within the country that works like a well-oiled machine, consistently helping to reduce transit times and ensure smooth cargo transportation for customers from the world over. Whether it is imports, exports or transit cargo, the team in India is geared-up and well-equipped to hasten the movement of products into, out and around India.

Working in conjunction with Chennai CFS and ICD Dadri, the NVOCC team has successfully churned large volumes, serving as a gateway and mediator for movement of cargo from China and Far East to the hinterlands of India through multicity consolidations.

The NVOCC division in India has set high benchmarks of customer service and continues to offer world-class transportation solutions that are customised to the specific requirements of diverse businesses across various industry verticals.

Over the years, it has also gained expertise in handling transportation of hazardous cargo, dangerous goods and Over-Dimensional Cargo (ODC) in complete compliance with the necessary regulations and safety protocols.

An unparalleled strategic advantage for the NVOCC division in India is that Allcargo has India’s widest CFS-ICD network at its service. Situated at vital trade hubs across the country, the facilities match international standards and offer bonded and unbonded warehousing services for all different types of cargo.

Equipped with highly trained professionals, the latest processes and state-of-the-art systems, Allcargo ensures the highest standards of multimodal transport services. In addition, Allcargo offers dedicated hazardous cargo management, fixed and committed stuffing and sailing schedules, ensuring the fastest turnaround in LCL. A number of value-added services in its portfolio, the focus on customer-centricity, partnerships with core carriers and local expertise to navigate through customs and regulatory requirements make Allcargo’s NVOCC division in India an ideal partner for international trade.

“With India setting sights on facilitating a much larger chunk of global trade, our aim is to boost it with seamless logistics solutions. Our land-side of business supplements the ocean freight solutions. Allcargo is India’s widest CFS network and we work closely with our 300 offices in more than 160 countries, providing NVOCC services. We are further strengthening our land-side business. Be it our foray into constructing Grade A warehouses and logistics parks or strengthening our capabilities in project and engineering logistics or offering warehousing and supply chain solutions for diverse sectors, we look forward to consolidating our position as India’s largest integrated logistics solutions provider.

Backed by these synergies and an intense focus on digitally enabling our operations to ride the next wave of change, we are all set to partner businesses with end-to-end logistics across India and beyond,” said Mr. Adarsh Hegde, Joint Managing Director, Allcargo Logistics.

As India seeks to drive towards its ambitious USD 5 trillion goal and floors the accelerator to reach this target, Allcargo is ideally placed to help customers smoothly manage and improve the logistics that makes them ramp up their global trade plans.

Quick Bytes

1
To reach this imposing target of becoming a USD 5 trillion economy by 2025, India needs to grow at least 8% for a couple of years.
2
To achieve this lofty goal, the government needs to improve logistics, ease of doing business and modernise its trade infrastructure.
3
Government leaders, including Union Commerce Minister Piyush Goyal, believe that exports need to grow at 19-20% annually to achieve this stiff target.
4
With an improvement in logistics and its convenient location, India is ideally placed to facilitate imports and exports from around the world.
5
A number of value-added services in its portfolio, the focus on customer-centricity, partnerships with core carriers and local expertise to navigate through customs and regulatory requirements make Allcargo’s NVOCC division in India an ideal partner for international trade.

All Issues

img 2016
img 2017
img2018
img 2019
image

Going global: Allcargo plots international expansion for its projects logistics business

Leaning on its learnings from The Philippines, the company has ambitious plans for taking its offerings to the world.


image

Bringing festive cheer with Avvashya CCI’s e-commerce logistics muscle

Here’s how millions of parcels and billions of dollars in orders are smoothly packed, sorted and delivered.


image

India: A global trade gateway, at a time of worldwide flux


Allcargo is poised to lead the country’s push to become a worldwide nerve centre for global trade.


image

Destination Jhajjar on the Grade A warehouse express


Here’s how ALIPPL is helping businesses across North India reduce logistics costs and hasten their time to market.



image

Transforming the logistics industry with digitalisation


Find out how a Digital Logistics Platform helps companies to trade using connected systems.




image

Digital technologies – the non-negotiable dimension in supply chains

What logistics businesses do with data produced owing to digitisation is what will give them a competitive edge over others in the field.


SUBSCRIBE TO image

Get a glimpse of our global presence, challenging projects and senior leadership talks through our FREE digital magazine.