India’s air cargo industry shows positive signs despite on-going challenges

On paper, India has always had the potential to become a key hub for the international air cargo market, but a lack of economic reform and limited infrastructure investment has slowed its development. However, despite the problems of the past, the cargo sector is now showing positive signs of growth and looks set to give a further boost to the country’s economy.

The historical challenges facing India are well documented and inadequate infrastructure in particular has proved a major stumbling block in further developing the country’s air cargo sector.

Key investments were often focused on major Tier-I cities such as Delhi and Mumbai, while smaller Tier-II cities such as Nagpur, Jaipur and Surat were neglected to the detriment of the industry as a whole by restricting the movement of cargo within India.

The government still needs to do more to improve infrastructure development and do away with the traditional working systems at airports to help speed up the flow of cargo traffic.

However, keeping in mind India’s growing demand for cargo services, the government is currently working on constructing new cargo centres. One example of this is the construction of a major multi-modal international cargo hub and airport in the Tier-II city of Nagpur, Maharashtra.

The Nagpur development will also see the creation of India’s largest Special Economic Zone (SEZ) built alongside the airport. The SEZ will offer tax incentives to attract further investment to the area, in addition to improved rail and road connections for cargo and passengers.

In addition to new developments such as Nagpur, and reducing restrictions for flying cargo overseas, the authorities are also upgrading some existing facilities at major airport hubs.

One example of this is the new air cargo terminal at Delhi, which is set to double the airport’s cargo handling capacity, as well as introducing new equipment and world-class support facilities.

Cities like Hyderabad, Kolkata, Nagpur and Delhi are currently the booming markets – and the modernisation of airport infrastructure can help to harness this growth and improve connectivity.

Cargo air charter by Chapman Freeborn

Anuj Kumar, cargo manager at Chapman Freeborn India, said:

“India’s air cargo charter market still faces challenges due to lack of proper infrastructure at key airports, as well as slots issues and congestion. A number of major airports are also poorly equipped to handle outsize cargo loads.

“India’s cargo market is growing but there are currently only a handful of professional players with extensive charter expertise. Clients should be wary of falling into the trap of using poorly experienced brokers with limited local knowledge.”

Shailendra Seth, director of Chapman Freeborn India, adds:

“Despite the rapid economic growth and technological advancements in our country, this sector is still waiting for many changes to be implemented. While the government is positively working towards encouraging growth in the aviation industry by bringing drastic changes in policies, current infrastructure is hardly capable to handle the growth. But despite of all these challenges, we feel the long term growth potential is quite positive.”