India moves up by 11 points on UN trade facilitation index

India performed well in 58 parameters including transparency, formalities, paperless trade and institutional cooperation

July 21, 2021

The biannual survey placed India on par with Asia-Pacific and Southwest Asian countries.

India is keeping pace with developed economies such as Australia, Japan, New Zealand and the Netherlands.

The amplification of cross-border trade has been identified as the stepping stone to economic recovery.

Political volatilities, infrastructural limitations and trade item restrictions will need to be overcome.

The UN Global Survey on Digital and Sustainable Trade Facilitation 2021 revealed that India’s rank in terms of trade facilitation has improved from 78.49% (2019) to 90.32% (2021), marking progress in cross-border trade as well as digital and sustainable trade facilitation. The survey, which is conducted once in two years, placed India among the high-performing countries in the Asia Pacific region and South-Western Asia. In the assessment of 58 wide-ranging parameters, India ranked 96.30% in the category of paperless trade, 100% in transparency, 88.89% in institutional arrangement and cooperation, and 95.83% in formalities. India’s trade facilitation prowess has enabled the nation to keep pace with growth in the developed economies, as evidenced by its position with reference to New Zealand, Japan, the Netherlands who in turn were placed at 93%. Experts opine that the next step in improving trade facilitation would be to amplify the pace of cross-border trade and remove restrictions to the same. 

Pushpita Das in her paper ‘Status of India’s Border Trade: Strategic and Economic Significance outlines the challenges and opportunities in Indo-Pakistan, Indo-Myanmar and Indo-China border trade. 

  • Indo-China trade – Cross-border trade occurs in the regions of Namgaya Shipki La (Himachal Pradesh), Sherathang (Sikkim) and Gunji (Uttarakhand), with a list of 44 mutually approved articles. The list has been recently expanded to include 12 items spread across export and import categories. Regional volatilities have had an asymmetric impact on cross-border trade till date. 
  • Indo-Myanmar trade – Zokhawthar and Moreh are among the important trade points in this regard. The 2010-2014 period saw a decline in trade with reduced demand for Indian commodities coupled with local poverty and poor border infrastructure. However, border trade has facilitated an improvement in employment prospects in the Northeastern States and the thriving of select commodities markets. 
  • Indo-Pakistan trade – Despite the vagaries in terrain and limitations in cross-border communication abilities, India’s trade with Pakistan saw an increase from the October 2008-November 2021 period. The key trading points include Chakkan Da Bagh and Salamabad among others, and the frequently traded commodities include agricultural products, spices, pulses and local handloom. 

Cross-border trade is often complicated by factors including poor connectivity, political and local volatilities, restrictions in mutually agreed items of trade, smuggling and illegal activities as well as hesitance to open borders for trade. It is imperative that stakeholders find methods to overcome these challenges to amplify cross-border trade.