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‘Infrastructure status to Logistics should be beyond financial benefits; need to remove blockages’: Bhadkamkar

The present Government of India is putting huge emphasis on facilitating trade and making improvement in ‘ease of doing business’. The target set by the Prime Minister is to improve ‘ease of doing business’ rank better than 50 in the world soon.  According to Mr Shantanu Bhadkamkar, Chairman, International Federation of Customs Brokers Associations (IFCBA); past Chairman, Federation of Freight Forwarders’ Associations in India (FFFAI) and past President (Maharashtra Chamber of Commerce, Industry and Agriculture (MACCIA), considering that this journey started from the point where India’s ranking was 142, current ranking of 100 (recently announced by the World Bank) is an excellent achievement in 3 years. “Just for comparison of ranking among BRICS countries, among 190 nations Russia tops the list with 35th position, followed by China with 78th rank. While the credit needs to be given to entire government machinery, the two initiatives that are noteworthy are formation of National Trade Facilitation Committee (a commitment made in 2013 Bali Ministerial Conference on trade facilitation agreement) and formation of DIPP (Department of Industrial Promotion and Policy) in Ministry of Commerce,” he pointed out.

IMG_0761Mr Bhadkamkar expected that all the ‘ease of doing business’ and ‘tax rationalization’ initiatives would lead to each sector across the country becoming more competitive, and businesses will be able to increase per person productivity. In his opinion, the Government needs to strengthen each segment of economy, particularly, the MSME sector by constructive reforms. “Ease of doing business is one among such reforms. Not only Statutory, Regulatory and Tax compliance is becoming increasingly rigorous and difficult, but in addition, it is becoming prohibitively expensive to comply. Particularly, the MSME sector cannot afford such expenses, and in addition, they also lack the bandwidth to handle these matters, as a very high level of expertise and diligence is required at every level,” he explained.

Mr Bhadkamkar also drew attention to a vital issue that concerns MSME/logistics sector. “The Government has announced some measures for ensuring that the large organisation pays MSME in a reasonable time. These measures need to be strengthened as, notwithstanding the provisions, the trend of delaying payment beyond the already long contractual payment schedule is on the rise. Same is true with arbitrary deductions in bills. This is an industry wide experience and needs to be restrained; otherwise, good players will be driven out of the logistics sector,” he raised the critical area. “All the listed companies should be compelled to publish online the date on which they obtained service and the date of settlement of bill. Mere financial support thanks to infrastructure status would not yield any significant result for the logistics industry. We should think beyond financial support’s aspect, to strengthen trade facilitation supported by a smooth logistics & supply chain system removing operational and financial blockages” he emphasised.

 Three Current Market Trends

Commenting on the prevailing market trends pertaining to logistics industry Mr Bhadkamkar maintained that there were 1. Increased focus on environment, security and safety; 2. Trade facilitation, particularly on cross border transactions and 3.  Encouraging manufacturing and manufacturers in their own country. He, however, was bullish about the future of customs broker business in India owing to pro-industry policies adopted by the present government that reflected in the massive improvement in “ease of doing business” and giving infrastructure status to logistics industry.

Shantanu Bhadkamkar-Chairman-IFCBAExplaining further his observation Mr Bhadkamkar maintained that while former two trends seem in contradiction with one another, it is a reality of a global economy, as it is not growing as fast as a decade ago. Hence, the third trend i.e protection of domestic industry is being done in a subtle manner. “It is an undercurrent, something you don’t see on the surface,” he endorsed. At the same time, all the industries & countries are taking a serious note of emergence of e-commerce and use of digital platforms for secure exchange of information and data.

In his opinion, all these trends affect India in the same manner as they affect rest of the world. The environmental issues and the country’s’ commitment on environmental protection has affected sectors such as mining, energy, manufacturing, transport etc. The countries are therefore, learning to be compliant in these matters along with security and safety, and yet become competitive in the global marketplace.

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