Govt. clears three export infra plans:

Govt. clears three export infra plans:  (Green signal for three export infra plans)

Context: Cargo terminal at Imphal airport, modernization of Karnataka facility for marine exports receive green nod. Introduction: With deficient infrastructure severely hurting the competitiveness of India’s exports, the government-for the first time under a new scheme launched in March to address the problem-has given its approval for three proposals including one to establish an Integrated Cargo Terminal (ICT) at the Imphal International Airport. Other applications that received the green signal from an (Inter-Ministerial) Empowered Committee (EC) chaired by Commerce Secretary Rita Teaotia include:

• Modernisation of infrastructure facility in Karnataka for marine exports-where the total cost is Rs 13.34 crore.
• Construction of a new ‘ Standard Design Factory’ building at Cochin Special Economic Zone (SEZ)
• The Estimate Committee on ‘Trade Infrastructure for Export Scheme (TIES)’ — in its first ever meeting that was held on June 9 — deferred on technical grounds an application to set up “the first dedicated facility” in India to test medical devices.This is proposed to be established at eh Andhra Pradesh Med Tech Zone in Visakhapatna.

Key points:

• The EC has granted an in-principle nod for a proposal to establish a ‘Coastal Cashew Research and Development Foundation’ in Karnataka, for which the total cost estimated is Rs 10 crore.
• The TIES, which is being implemented form FY 18 till FY20, has a budgetary allocation of Rs 600 crore. The scheme’s annual outlay is Rs 200 crore.
• According to a March 2016 report on ‘Export Infrastructure in India’ by the Department Related Parliamentary Standing Committee on Commerce, “deficient infrastructure and the manner in which infrastructure is being operated in India are the major obstacles to ensure competitiveness in manufacturing of goods and exports thereof.”
• The report said Indian exports lose competitiveness on account of huge logistics costs.
• The logistic cost in India is about 14% of the GDP whereas in advanced economies like the U.S. and the European Union, it is 8% and 10% of the GDP respectively.”
• The Standing Committee further said, “Owing to sub-optimal logistic capability, certain sectors dependent on logistics lose as much as 2% on sales return.
• An Assocham study conducted a few years back shows that India runs against a disadvantage of about 11% of its trade due to deficient infrastructure.
• According to an Assocham-Resurgent India jointly study, “India can save up to $ 50 billion if logistics costs are brought down from 14% to 9% of country’s GDP thereby making domestic goods more competitive in global makets.
• The objective of the TIES is to “enhance export competitiveness by bridging gaps in export infrastructure, creating focused export infrastructure and first-mile and last-mile connectivity.