India’s air cargo sector on growth track

India’s air cargo sector is expected grow at a compounded annual growth rate of 5.5 per cent to reach 2.8 million tonnes per year by 2018, according to a study by market research agency Netscribes.


India’s air cargo sector on growth track


India’s air cargo sector is expected grow at a compounded annual growth rate of 5.5 per cent to reach 2.8 million tonnes per year by 2018, according to a study by market research agency Netscribes. In 2014, a total of 2.26 million tonnes of cargo was uplifted with the study pointing to continued growth for at least the next five years. A key factor behind the growth of the air cargo industry has been the relaxation of the FDI (foreign direct investment) limit by the government.

The present government is willing to attract foreign investment and that has proved to be a major boost for the industry. “Allowing 100 per cent FDI in existing airports and under automatic routes along with 100 per cent tax exemption for airport projects for the next ten years have been major growth drivers,” said the study.

With increasing trade activities in the Asia-Pacific region, the Indian air cargo industry has the second fastest growth rate in the world, ranking just behind the Middle East. Recently, the government has also identified 24 airports located at tier-2 and tier-3 cities across the country for the development of cargo terminals. The facilities will be developed after carrying out feasibility study and minor modifications in the old/ redundant passenger terminal buildings.