India Jumped 16 Places In World Bank's 2023 Logistics Performance Index Since 2014

New Delhi, Oct 17 (KNN) The World Bank's 2023 Logistics Performance Index (LPI) offers a glimmer of hope, with India ranking 38th out of 139 countries. This marks a significant improvement from its previous positions, rising six places since 2018 and 16 places since 2014.

India stands at a pivotal moment in global economic realignment, according to Franziska Ohnsorge, Chief Economist, World Bank.

Ohnsorge suggests that India could further boost its LPI ranking by fully digitising its customs clearance process, thereby expediting procedures.

As international supply chains undergo rapid transformation, India's sophisticated industrial base and skilled workforce position it favourably to capitalise on these changes, reported Mint.

However, Ohnsorge cautions that to fully realise this potential, India must address key policy areas, particularly in reducing tariffs and easing restrictions on foreign direct investment (FDI).

In an interview with Mint, Ohnsorge highlighted that South Asia, including India, lags behind most emerging economies in several crucial economic indicators.

The region sees lower portfolio flows and fewer loans from global banks compared to its peers. Additionally, average import tariffs in the region exceed the global average, with India's tariffs surpassing 15 per cent, placing it in the top quartile globally.

The ongoing geopolitical and economic shifts present a unique opportunity for India. As Western nations seek to diversify their supply chains beyond China, a strategy dubbed ‘China Plus One,’ India emerges as a potential beneficiary.

This shift is driven by multiple factors, including rising labour costs in China, escalating trade tensions, and supply chain disruptions exposed by the COVID-19 pandemic.

However, the latest World Bank report underscores a significant challenge: most South Asian countries, India included, rank among the least open to global trade and investment compared to other emerging market and developing economies (EMDEs).

Ohnsorge warns that without increased openness to global trade and foreign investment, India risks missing a rare opportunity to accelerate its growth and development in the current global landscape.

The economist emphasises the urgency of the situation, describing it as a ‘very small window of opportunity’ as global supply chains undergo reshaping. She cautions that if the region remains closed off, it will struggle to capitalise on these emerging opportunities.

Ohnsorge also notes that global trade remains weak in the post-pandemic era, and the rapid growth rates of the past are unlikely to be replicated.

As India navigates these complex economic currents, its policy decisions in the coming months and years may prove crucial in determining its role in the reshaping global economic order.

(KNN Bureau)