INDIA & MIDDLE EAST: India growth set to outpace China

A new report on the Indian freight sector by Business Monitor International (BMI) highlights India’s strong growth in 2010 and is expected to continue to do so in 2011 and through the forecast period. A major challenge according to the report, will be the government´s adoption of public-private partnership (PPP) model for airport development and […]


A new report on the Indian freight sector by Business Monitor International (BMI) highlights India’s strong growth in 2010 and is expected to continue to do so in 2011 and through the forecast period. A major challenge according to the report, will be the government´s adoption of public-private partnership (PPP) model for airport development and its moving towards privatising the country´s rail freight sector. So far, potential growth has attracted private investment and problems about return or local political influence have been overcome, the report noted. According to BMI forecasts, real GDP growth in India in 2010 will be 7.9 per cent, rising to 8.1 per cent in 2011. From 2011 to 2015 BMI expects it to average 8.1 per cent, outpacing even China, where the group forecasts growth to average 7.6 per cent. A large middle class with high income and consumption is emerging in India which will have a significant impact on the freight market. India´s air freight recovered strongly in 2010, with 8.2 per cent growth. The report notes that Air India is troubled, with current debts of nearly US$4 billion. With the sell-off of its air cargo planes, the company looks set to move away from running an air freight service. Logistics operators including DHLGlobal Forwarding, FedEx, TDG, M+R Spedag Group have been keen to expand their business in India. Among the challenges highlighted by the BMI report are the potential of a second global recession, labour unrest and the potential inadequacies of the PPP model. “A PPP model may not be sufficient to counter the inadequacies in the country´s infrastructure rapidly enough, and could lead to increase bottlenecks,” the report said. “Furthermore, there is little sign of the PPP model having been applied to infrastructure projects such as roads.”