Recent research by the Confederation of Indian Industry (CII) and Amarthi Consulting has further emphasized the need for major advancements in India’s supply chains. The report highlights that though the retail sector in India is rapidly growing, lack of infrastructure and efficient supply chains are costing India $65 billion a year. The report found that India’s supply chain costs amount to “12-13% of its GDP as compared to 7-8% in developed countries.”
MUMBAI: A whopping $65 billion is lost every year on account of the inefficient supply-chain system in India and this despite the Indian retail sector being in the high-growth mode, a report said.
The industry is expected to touch $879 billion by 2018, but if the present challenges in its supply-chain system are not addressed, then the sector’s growth could get hampered, it warned.
The report by apex industry body, CII, and Amarthi Consulting , titled ‘Global competitiveness of retail supply chain-Challenges, Strategies and Recommendations’ stated that, “since Independence only 20 per cent capacity has been added to the railway network but the traffic has increased ten times. In a sector where margins are wafer-thin, the supply- chain management is a critical enabler to profitabilty and this has to be improved.”
The report released today also said supply-chain costs in India are about 12-13 per cent of the GDP as compared to 7-8 per cent in developed countries. Hence, the country loses out arouund $65 billion annually.
It further said the challenge also lies in the country’s demography, geographical spread, distinct consumer preferences and differential taxation laws, which needs to be addressed.