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Trade environment in India not conducive: WEF

business Updated: Jun 18, 2008 22:43 IST

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India fares worse than 70 other countries in the world, including its neighbours like China and Sri Lanka, in terms of creating a conducive trade environment, the World Economic Forum said on Wednesday.

In its Global Enabling Trade Report 2008 covering 118 countries, WEF ranked India at a lowly 71st position because of its "severely" restricted market access and various tariff barriers, among other factors.

The list, published for the first time and ranking the countries for measures facilitating trade, has been topped by Hong Kong, followed by Singapore, Sweden, Norway and Canada at the first five ranks.

These are followed by Denmark, Finland, Switzerland, Germay and New Zealand in the top ten positions.

Besides, countries like China, Japan, US, UK, Australia, UAE, Malaysia, South Africa have all been all ranked ahead of India.

"India's weak position reflects a mixed performance on the four pillars of ETI (the index). While it boasts fairly good border administration and an acceptable business environment, market access continues to be severely restricted," WEF said.

WEF said the index measures factors, policies and services facilitating free flow of goods over borders and to destinations. The four factors taken into account for the index include market access, border administration, transport and communications infrastructure and business environment.

Unlike most other countries, tariff barriers represent a more serious impediment than non-tariff barriers in India, it noted, adding that only a small share of goods is imported duty free.

WEF added that while India's border administration meets many needs of exporters and importers, it continues to be affected by corrupt practices that hamper an efficient transport of goods across borders.

"A vast number of customs related services are available in India and clearance entails low pecuniary costs, although it is time consuming," it said.

WEF said India needs more airports and high quality roads, though it is well connected through maritime routes. Trade-related infrastructure and relevant services are also fairly well developed in India.

"India's business environment is in line with the country's overall assessment, with the regulatory environment ranking 64th and security assesses at 56th among the countries assessed," the WEF report said.

The report attributes Hong Kong and Singapore's top rankings to their openness to international trade and investment as part of their successful economic development strategy.

"Both countries have put into place customs administrations that are highly efficient in getting goods over borders. The attributes are further supported by business environments that are conducive to the logistics and transport industry," it said.

The index, which ranks the US at 14, the UK at 16 and China at 48th position, would be "useful for policy-makers interested from benefiting from trade".

"By integrating and benchmarking the full range of factors that affect trade, both at and behind the border, it provides meaningful guidance on what their priorities should be," co-editor of the report Robert Z Lawrence said.