India: Courier industry concerned over weight

After the communications ministry drew from examples across the world for drafting the Indian Post Office (Amendment) Bill, the express/courier industry is now using the same global path to convince the government that `monopoly’ is a bad word.

The international examples are being cited mainly to illustrate the weight-and-rate criteria in the express/courier industry. It is learnt that the express industry representatives in a meeting with Ajay Shankar, secretary, Department of Industrial Policy and Promotion (DIPP), on Monday, cited global examples to make their point that some of the provisions in the Indian Post Office amendment draft bill are `retrograde’ in nature.

The industry is expected to make representations to the Prime Minister’s Office (PMO), Planning Commission and the communications ministry, among others. Among the provisions to which the express industry is objecting include lowering of FDI to 49 per cent and exclusivity of the Indian Post to carry shipments below 150 gram.

The express industry could be allowed to carry shipment below 150 gm only if they charge a multiple of 2.5 times the speed-post tariff.

Currently, 100 per cent foreign investment is allowed in the sector and if FDI is lowered, India could lose out on its competitive advantage in the supply chain industry and global express distribution system, industry representatives are believed to have pointed out.

The industry is also opposed to the provision on regulating express operators and yearly renewal of registration.

The express operators have argued that among the countries where price multiple model is in place, the express industry is mostly out of the ambit of any monopoly. In New Zealand, UK, Estonia, Sweden, and Malaysia, for instance, there’s no monopoly of the government in the postal sector.

Sources in the government had earlier pointed out that the weight-and-rate criterion is prevalent in other parts of the world as well.