The world economy today is more competitive than ever, with countries vying to attract investments and resources. In this exercise, they are aided by a plethora of performance indicators that are regularly published by various entities, often combined with their internal assessment. Therefore, scores on these indicators carry significant economic consequences.
As India marches towards its rightful place on the global stage, Indian policymakers need to track country performance under different indicators. International trade is an important field wherein competitively better performance is likely to be most visible and support government initiatives such as ‘Make in India’.
International trade as an “engine of growth” prefers countries and routes that provide the most facilitative environment. India, as signatory to the World Trade Organization’s Trade Facilitation Agreement (TFA), has made concerted efforts to improve trade facilitation and ease of doing business, fulfilling all the TFA commitments well in time.
Remarkable progress has also been made in delivering on “TFA Plus” initiatives aimed at infrastructure and technology augmentation, which go beyond TFA’s objective of “simplification, modernisation and harmonisation of export and import processes”. These measures have contributed to reduction in trade costs and time, as measured by the average cargo release time.
Recognising the importance of stakeholder confidence in the trade facilitation initiatives, the Central Board of Indirect Taxes and Customs has been publishing the average monthly cargo release time for major customs ports/airports since 2017. These monthly Dwell Time Reports (DTRs) are supplemented by more insightful annual National Time Release Study (NTRS), both based on unimpeachable timestamps obtained from the customs automated system.
Jawaharlal Nehru Custom House (JNCH), the largest custom house in the country, which pioneered annual TRS since 2017 shows that the average import release time for all consignments covered during the study period (namely, first week of the calendar year) has improved from 181 hours in 2017 to 88 hours in 2022. The average release time in 2022 was more impressive at 55 hours and 51 hours for regular importers and trusted authorised economic operators, respectively. Time series analysis of DTR reports reveal similar improvements at other major ports/airports, showing that green channel cargo takes less than halve the time it took five years ago.
However, the performance indicators that seem to attract more attention globally are those published by various multilateral entities, including the World Bank. In a paper titled ‘Measuring Trade Facilitation: Evidence from India’ (Carnegie India, May, 2021), Chauhan VS and Vijayakumar S examined six such indicators — namely, Organisation for Economic Co-operation and Development’s Trade Facilitation Indicator; World Bank’s Trading Across Borders, which was a component of Ease of Doing Business Index, Logistics Performance Index and Governance Indicators; the World Economic Forum’s Global Competitive Index ; and the United Nation’s Global Survey on Trade Facilitation and Paperless Trade Implementation.
The study highlighted the survey-based nature of these indicators and found that the “inter-temporal trends they exhibit for India, reveal that they have not been moving in agreement with each other and that some of the trends are evidently counterintuitive”. Further, comparisons between their select sub-indicators reflected poorly on their robustness.
These findings are quite obviously attributable to the methodologies adopted. Performance indicators, based on the surveys of a select few individuals, often not well-versed with the ground-level realities and guided by perceptions that are coloured by their deep biases, are unlikely to produce consistent results, as brought out in the Carnegie paper.
Our discussions with the concerned officials of other emerging and the less developed countries have indicated shared concerns regarding the oversized influence of such perception-based surveys, which fail to adequately reflect ground-level trade facilitative efforts.
The time is perhaps ripe for India to take lead in the development of a global trade facilitation indicator that better reflects the ground realities of the emerging and less-developed countries.
Johri is Chairman of CBIC and Chauhan is Commissioner of Customs at ICD, Tughlakabad. Views are personal