Union Budget 2022-23: Without support, the sector that keeps trade and commerce moving across borders could be faced with multiple blocks and challenges
Indian Union Budget 2022: Upgrading India’s logistical facilities is key for the country’s economy. Image courtesy Kgbo/Wikimedia Commons
One of the key sectors of the Indian economy is logistics. Just like every other sector, the overall logistics sector too took a hit during the COVID-19 pandemic struck years of 2020 till date. As industry players, we say the sector needs the right set of incentives and support measures to accelerate its recovery. Without support, the sector that keeps trade and commerce moving across borders could be faced with multiple blocks and challenges.
Union Budget for 2022 could be instrumental in catalysing the economic momentum for the sector. One of the common asks towards the upcoming Budget, is that it is necessary to introduce policy initiatives to accelerate the development of an integrated logistics ecosystem. It is expected that the upcoming budget will address measures to push reforms and increase supply chain efficiency to ultimately cut down logistics cost.
Even though the logistics industry has seen incredible growth over the past few years owing to the boom in e-commerce, some of the expectations that we have from this year’s Union Budget are as follows.
- Large incentives for jewellery exporters for exporting greater than $1,000 shipments which will boost e-commerce and could make India a global leader in jewellery, like we are with regard to diamonds.
- A higher interest rate in the Gold Monetization Scheme will lead to improved realization of domestic gold and thus contribute to reduction of gold imports and overall helping the Indian Balance of Payment situation and enhance employment in the jewellery sector.
- A higher budget for new airports, tax benefits for logistics capex and simplification of procedures for new exporters through a single window between DGFT, Customs & GST will unquestionably help the e-commerce & logistics industries.
With improved logistics infrastructure, there is a significant growth potential of trade in general. Many companies are moving their manufacturing units into India, bringing India closer to becoming a global manufacturing hub. At a time like this, it is vital for India, as a growing economy to reduce logistics cost to boost export competitiveness.
The upcoming Union Budget should aim to increase transparency in the regulation of the logistics industry, promote digital drive for logistics movement, focus on the creation of logistics hubs, and increase investment to remove impediments to logistics movement.
The author is Group CEO, BVC Logistics. Views are personal.
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