India Must Slay Its Sacred Infrastructure Cows

The Eye for Procurement Conference this week really made me think about the total cost factors of sourcing globally. And it also made me consider India's potential to become a true export superpower if it can get out from under its own bureaucratic weight, hampering infrastructure build out. Despite labor costs that are often 1/25th that of the West, India's transportation costs are among the highest in the world. Consider that, according to this article in Canadian Transportation and Logistics, "India's export-driven progress is hampered by some of the world's highest port and rail costs ... the cost of transporting one TEU one kilometer in India is 53% higher than in the United States." And if India continues to ignore the competitive world market, things will only get worse. The above referenced article refers to the fact that by "late 2008 some 25% of world container ship capacity will be comprised of vessels of at least 6,000 TEU (twenty-foot equivalent units) but that India does not yet have a port that can handle this class of ship." Given the rise of the Indian manufacturing sector -- and its strengths in such areas as metals and textiles -- it would be an absolute shame if the country's roads and ports continues to hold back economic progress. The infrastructure clock is ticking and India does not have much time to slay the sacred bureaucratic cows holding it back.

Jason Busch

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