On Monday, the Union government admitted that Indian exporters end up losing anywhere between 7% and 10% of the value of their exports due to time taken to handle cargo at ports, the slow pace of inland transportation and other issues. These infrastructural problems have never received the attention they deserve.
In the case of many labour-intensive exports, textiles and apparel, for example, this is a substantial dent. Often, it is sufficient to inflict a knock-out blow, especially when these exporters have to compete with economies that have far cheaper labour, such as Bangladesh and Vietnam.
There is a clear policy lesson here: instead of trying to prop exports up with all manner of stimulus packages, if the government is to spend money in reducing these costs, Indian exporters will be in a much better position to give a fight to their counterparts from other Asian countries.