Shashi Kiran Shetty, Founder & Chairman, Allcargo Logistics, speaks to CargoInsights on the effects and opportunities for the Indian trade due to the Russia-Ukraine war and the lockdowns imposed in China due to the COVID-19 pandemic.
Considering how the global COVID-19 pandemic has unfolded over the past two years, there is no doubt that it created an opportunity for Indian exporters. At a policy level, India has taken a number of steps in the right direction with production-linked incentives, Aatmanirbhar Bharat and an additional credit of INR 2 lakh crore to MSMEs under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). In March 2022, India’s overall exports touched an all-time high of more than USD 600 billion, and this goes to show that businesses, big and small, did optimise the situation and bring in more business. The possibilities, however, are much larger. This is actually the right time for India to reinforce its leadership as a global trade destination and hub. And for that, we need a holistic focus. Public-private partnerships in the logistics sector give impetus to foreign investments. They collaborate across the logistics ecosystem to implement the PM Gati Shakti Master Plan for a robust physical and digital infrastructure, all of which need result-oriented action. The vision should be to grow into a global logistics powerhouse, and more business coming into the country will become one of the most likely outcomes.
Taking a slightly different perspective, focusing on ESG standards too, can help strengthen India’s position. In light of the current scenario where businesses are already looking to diversify global business supply chains into other dependable sourcing and manufacturing locations, if we can establish India as a feasible one with the added advantage of being environmentally sustainable, our competitive advantage and opportunities to bring more business into India will be even better.
This is actually the right time for India to reinforce its leadership as a global trade destination and hub. And for that, we need a holistic focus.Shashi Kiran Shetty
Globally, there have been initiatives like providing employment to refugees who have work permits; mobilising help and resources where needed; etc. to mitigate the impact of the ongoing crisis. However, while the Russia-Ukraine war is impacting global trade by causing disruptions and consequent fluctuations to domestic and international business supply chains, its direct impact on India’s imports and exports has been fairly minimal. A sustained effort to enhance capabilities, boost manufacturing, innovate and digitalize the logistics sector would help increase our resilience and could hold us in good stead to withstand any possible impact on EXIM trade in the near future.
The International Monetary Fund (IMF) predicted in its most recent World Economic Outlook that global growth would slow from 6.1per cent in 2021 to 3.6 per cent in 2022 and 2023. Shetty believes that whatever the estimated levels of growth are, they will actually be driven from the front by MSMEs. Over 63 million in number, they are considered the backbone of the country’s economy. With an inherent ability to be agile and flexible owing to their smaller size and nimble operations, MSMEs have an ideal opportunity to level the playing field by adapting a digital-first approach and creating a competitive advantage through technology. Through various initiatives and schemes like Digital India, Startup India, credit-linked capital subsidy, Pradhan Mantri Mudra Yojana, etc., the government is fortifying MSMEs to boost business, not only in India but also explore new markets and niche customer-bases across the globe.
With MSMEs having proved their mettle to recalibrate and reinvent their ways of conducting business in the aftermath of the global COVID-19 pandemic, one can hope that the intensity of the impact of another economic bodyblow, should it occur, will be less.
Regarding the initiatives taken for responsible logistics, green logistics, and women’s empowerment, Shetty commented, “Allcargo Group lives up to their ideals of doing business with a purpose. We consider the planet as our home, the world as our family, and endeavour to act in the best interests of our customers, employees, other stakeholders, and the community at large.”