UPS faces protective challenges with India
India’s postal service wants to rein in international express couriers doing business in India, in what many here see as a backward step in the liberalization of the country’s economy.
A recent proposal to be reviewed by Parliament gives the postal service exclusive rights for express delivery of letters weighing up to 300 grams within the country, virtually shielding the government agency from competition.
The proposal also blocks foreign ownership of express couriers operating in India and requires large private courier services to fork over 10 percent of their profits to a fund that helps the government improve its delivery service to the country’s rural areas.
UPS Jetair’s managing director, Pirojshaw Sarkari, said the express courier industry has banded together to fight the new proposal.
India historically has favored trade measures that have protected its own markets from foreign competition, even as it decries unfair restrictions of its exports abroad. It wasn’t until the early 1990s that India began a big push to open its markets to the West, resulting in a huge export boom that helped international couriers flourish.
For now, UPS is hoping its retail stores bring more brand-name recognition in a country where many people still go to streetside letter-wallahs who type up their correspondence on manual typewriters.
Already, international express carriers are part of a new trade route as millions of Indian expatriates living in the U.S. and Canada use companies like UPS to send an endless stream of birthday and wedding gifts, as well as the latest technological gadgets that might be hard to find in India. In return, Indian families here send their relatives abroad hard-to-find Indian spices, textiles and other gifts from the homeland, turning international companies like UPS into the modern-day equivalent of ancient trade routes. The UPS Store chain offers packaging and express shipping, as well as digital printing, office supplies and ticketing services for Jet Airways, one of India’s largest airlines.
