Q. Consider the following parameters:
1.Logistics services quality
2.Ease of arranging shipments
3.Lowering tariffs and import duties
4.Subsidizing logistics costs
5.Devaluing the currency
Which of the above parameters does India need to address in order to enhance its position in the Logistics Performance Index (LPI)?
Explanation – The Logistics Performance Index (LPI) is a benchmarking tool developed by the World Bank to assess the quality of trade logistics across different countries. India ranked 38 among 139 countries in LPI 2023. Hence, in order to improve its ranking further India needs to improve Logistics services quality, Ease of arranging shipments, lower tariffs and import duties.
However, Subsidizing logistics costs and devaluing the currency are not considered relevant parameters for improving India’s LPI ranking. While subsidizing logistics costs may provide temporary relief, it does not address the underlying issues affecting logistics efficiency. Similarly, devaluing the currency may make exports more competitive in the short term, but it can lead to economic instability and long-term harm.
Source: ForumIAS
