INDIA: India set to become key cargo hub say analysts

Indian air cargo, hamstrung for a number of years by cost, cargo structure and infrastructure constraints, is set to take off within the next three to four years according to a new report by consultancy firm, Frost & Sullivan. An Indian economy on a solid growth trajectory and ongoing liberalisation of the aviation sector, will […]


Indian air cargo, hamstrung for a number of years by cost, cargo structure and infrastructure constraints, is set to take off within the next three to four years according to a new report by consultancy firm, Frost & Sullivan.

An Indian economy on a solid growth trajectory and ongoing liberalisation of the aviation sector, will be the key drivers which will also see the country emerge as a cargo hub due to its geographic location between SE Asia and EU nations, according to the report.

Frost & Sullivan’s analysis of the Indian air cargo market, finds that the total air cargo (domestic and international) was about 1.77 million tonnes in 2007-08 and is expected to grow at a compound annual growth rate of about 8.3 per cent by 2013.

“Increasing globalisation, integration of the world economy, and the strengthening of India in the IT service provider space has resulted in a booming Indian economy, supporting a thriving global economy,” say Frost & Sullivan analysts Arun Narayanan and Chethan Kambi. “This has increased the aggregate demand and is an important driver for air cargo services.”

The market will get a further boost with the recent raise of the FDI limits allowing up to 74 per cent stake in Indian cargo airlines, as this will bring in the much-needed capital and global best practices to the Indian air cargo industry. Proactive and favorable government policies will encourage investments in the air cargo industry and facilitate the setting up of the required amenities and infrastructure. It will also help establish multi-modal cargo hubs for quick and efficient transportation of cargo, the two analysts say in their report.