According to a report by Indian apex industry body, CII, and Amarthi Consulting titled “Global competitiveness of retail supply chain-Challenges, Strategies and Recommendations”, $65 billion is lost every year on account of the inefficient supply-chain system in India.
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.
"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 profitability and this has to be improved," said the report, which was released today.
It also said that 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 around $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.