India's Business Bottleneck

We all know that countries like India and China are becoming global giants. In order for India to keep up with countries like the United States and China, it must improve its railroad system.  Railroad routes are often severely backed up due to overbooked trains and the fact that railroad travel is the only affordable option for many people in India. In order for India to compete with China for major global economic growth, Indian transportation needs to be improved significantly. The Prime Minister of India recently set a goal of an annual growth rate of 10%, but without a major renovation of India’s transportation system this goal will be unattainable.  It looks like India has a lot of work to do to continue to compete globally. 

The railroad system in India is owned by the Indian government, and with recent elections improving transportation has not been made a top priority.  With India’s continuous global expansion the railroad system needs to be the ‘backbone’ of the country’s economy.  Currently, the system is moving seven billion people and 830 million tons of cargo each year, but this is not enough for India’s fast growing economy.  Another roadblock for doing business in India is the high cost for rail freight.  Indian freight tariffs are twice as expensive as in China and the United States. 

Global business in India is already suffering from unfavorable railroad conditions and high prices, causing international trade to suffer.  With its large population and spirit of growth India has great potential, but the transportation system will continue to damper India’s global competitiveness unless it is addressed.