The economic survey had highlighted that rising inflation and monetary tightening led to a slowdown in global output beginning in the second half of 2022…reports Asian Lite News
Fair and equitable access to logistics for developing nations in international trade will be a top agenda item for New Delhi during its G20 presidency, after shocks to global supply chains from the Covid-19 pandemic and Ukraine war drove freight rates to record levels last year.
India assumed the G20 presidency in December last year and will be chairing over 200 multilateral meetings during the year. While the presidency does not come with any formal power, it plays a key role in setting the tone for discussion on a global scale. Members of G20 contribute nearly 75% of international trade and over 80% of the world’s economy.
Exporters said they faced severe problems post-covid as overseas freight rates jumped as much as 300-350% from pre-covid levels. Moreover, the lack of containers during the supply chain disruptions caused major challenges.
“Development of an Indian shipping line of global repute is need of the hour, as exporters are solely at the mercy of foreign shipping lines and the country repatriated over $80 billion as transport services cost during the calendar year 2021,” the Federation of Indian Export Organizations said. Last year, commerce minister Piyush Goyal had expressed dissatisfaction over the opacity of shipping rates. Goyal said the logistics sector had a lot of leakages and that shipping rates were not transparently announced.
“During covid-19, shipowners were not willing to come to India. They used to seek a 50% premium. Problem is we have very few shipping lines and we have been dependent on foreign shipping lines. Peak rates from India to UAE was $1200, but now it has come down to $50 due to lack of demand,” Raajesh Bhojwani, CEO & MD, RBB Ship Chartering Pte Ltd Singapore said.
The government official quoted above further stated that a production linked incentive for containers is also in the works.
According to the government, India requires about 350,000 containers every year, and the demand is expected to increase going forward considering that India has set an export target of $2 trillion by 2030.
The economic survey had highlighted that rising inflation and monetary tightening led to a slowdown in global output beginning in the second half of 2022.
As per United Nations Conference on Trade and Development (UNCTAD) latest global trade update, global trade growth turned negative during the H2:2022, and geopolitical frictions, persisting inflationary pressures, and subdued demand are expected to suppress global trade further in 2023.
“This is likely to affect many countries, including India, with the prospects of sluggish exports continuing into FY24, compared to the promise shown at the beginning of the current year,” the survey stated.
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