Namrata Kath Hazarika | 10 Feb, 2012

A major setback for the Indian small and medium enterprises (SMEs) at present is high logistics cost, which is hurting their business growth and competitiveness globally, said an industry expert and Chairman of SCA Group of Companies, Tushar Jani.

"All this infrastructure which has been built are actually developed with such a high cost. So, SMEs' cost have gone up," Jani told SME Times recently.

He said that SMEs face potential difficulties due to delay of shipments as huge cargoes get stuck at the port due to unconditional reasons. This increases the costs of the SMEs.

Jani added, "When SMEs cost go up they have to move five or six days before, why it should be?"

"The lean and mean supply chain should work in four or five hours. Why the cargoes should stay in the port for so long?"  he questioned.

"That is why, SMEs logistic costs are high upto 14 per cent. It is not that our transportation costs is high. These are the leakages that make our logistics costs high. This is where the SMEs face major problems." Jani added.

Pointing out the challenges further, the President of the Antwerp Port Authority, Marc Van Peel said that the major challenge for the enterprises today is the poor connectivity of the port with the hinterland.

"I think potential investment has to be made there in the infrastructure development of Indian ports like in inland port ways, build dedicated railways, improve road infrastructure, etc. These all are very important for the development," Peel said.

In fact, long waiting of the vessels in the ports are also killing ample of businesses, he further added.