India - India's growing conflict between trade and transport : issues and options

India was a rather marginal participant in world trade during the early years after independence. Since 1980, however, the structure and orientation of Indian export trades have undergone fundamental changes. Substantial progress has been made in diversifying the export base - manufactured goods have increased and the traditional bulk sector has shrunk. Key targets for the export of manufactured goods are the European, Japanese and North American markets. However, these markets are characterized by increasingly efficient trade logistics, including containerization and multimodal transport arrangements. To enable further trade growth, India is confronted with a need to tie into the highly organized international trade logistics networks, something the country is totally unprepared to cope with in terms of demanding logistical arrangements. There is a real danger that India's trade performance will deteriorate, if no corrective measures are taken. A highly fragmented service industry, outdated regulations, heavy Government control, a constrained private sector, and largely inadequate infrastructure have curtailed efforts to improve trade logistics, including containerization and multimodal transport arrangements in India. Major reforms are called for so that an effective framework for initiating urgently required system adjustments can be established.