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Kamal Narang

New release: The Lead Economist and Trade Programme leader, The World Bank Institute, Dr. Gianni Zanini, flanked by the Deputy Project Coordinator Unctad-India Programme, Mr Abhijit Das, and the Director, FICCI, Mr Manab Majumdar, releasing a report in the Capital on Friday. —

Our Bureau

New Delhi, July 11 India ranked 120 out of 178 countries in business environment, according to the ‘World Trade Indicators 2008’ report released at a joint seminar by FICCI and World Bank on Friday. The assessment lambasted the country’s ranking mainly on account of its high tariff barriers.

India’s average tariff of 42 per cent in agriculture is about seven times that for non-agricultural products (6.4 per cent) and is one of the highest in the world. The duty-free imports from the most favoured nations constituted only 7.8 per cent of total merchandise imports in 2005.

“India’s institutional and business environment is poor in terms of the ease of doing business. While India has achieved substantial reductions in tariffs since the nineties and the current external environment is relatively favourable compared to low-income and South Asian country group averages, India’s agriculture exports face high barriers and its share of trade with preferential partners is low,” said Mr Gianni Zanini, Lead Economist and Trade Programme Leader, The World Bank Institute, at a joint seminar organised with FICCI.

Globally, over the past decade, countries with lower barriers tended to have stronger, more consistent trade and export performance, the report indicated. However, “with improvement in trade facilitation, real growth in trade and related jump on trade integration has been high, driven by high import requirements of a booming economy and services exports,” it said.

The World Trade Indicator report lauded the country’s logistics performance and said, “India surpasses its comparators on nearly all aspects of the logistics performance index with a rank of 39 (out of 150). This was the strongest indicator of timeliness of shipments, while its weakest were efficiency of customs and other border procedures and quality of transport and information technology (IT) infrastructures.”

It highlighted that the real growth of trade was 11.5 per cent in 2007, higher than the 2005-06 average, but remained slightly lower than the growth rate during the late 1990s at 13.3 per cent and early 2000s which stood at 12.5 per cent.

“Imports have grown faster than exports in recent years, reflecting the growing demand of India’s booming economy, especially for energy and infrastructure,” it commented.

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