AIR CARGO INDIA: Cargo ‘making it in India’
India's air cargo throughput will rise from 2.6 million tonnes in 2015 to nearly 8.7 million tonnes by 2030.
February 23, 2016
By PLA Editor
Air & Cargo Services air cargo Air Cargo Asia air cargo freight Air Cargo India Air Forwarding air freight Air Freight Asia Air Freight Logistics air freighter air freighting Air Logistics Asia Air Shipping Asia airlines cargo airways cargo asia cargo news cargo aviation India Make in India Narendra Modi
India’s air cargo sector is expected to grow by more than 180 per cent within the next 15 years, in a large part boosted by Indian Prime Minister Narendra Modi’s ‘Make in India’ campaign focusing on growing manufacturing from its present 15 per cent of GDP to a full 25 per cent by 2022, according to Dr Renu Singh Parmar, senior adviser for India’s ministry of civil aviation.
She also estimated that India’s air cargo throughput would rise from 2.6 million tonnes in 2015 to nearly 8.7 million tonnes (including 3.6 million tonnes of domestic cargo and 5.1 million tonnes of international traffic) by 2030, creating an urgent need to improve supply chain logistics and airport infrastructure across in the country.
“We need a robust supra national supply chain – air, road, rail and sea,” Dr Parma said, speaking at the opening of the Air Cargo India conference, adding that logistics costs in India comprise about 13-14 per cent of GDP, signficantly higher than the 7-8 figure of developed countries.
But with a sharp focus on improving the efficiency of the air cargo logistics sector in India she outlined the major accomplishments the government has made in improving infrastructure and regulatory processes. This includes the granting India’s air cargo industry a ten-year tax break for any infrastructure improvements made at an airport, the creation of free-trade zones, construction of new cargo facilities, 24/7 Customs operations, promotion of free trade and warehousing zones, paperless systems, and implementing air freight stations. Focus is also being put on reducing “dismal” dwell times that currently can be as bad as 4.5-5 days down to 48 hours.
Parmar also noted that India increased the foreign direct investment caps on airfreight operations in 2014 to 49 per cent without government approval and 74 per cent if government approval is sought. “The civil aviation policy is a very forward policy in the search for air cargo, which will also help make the prime minister’s ‘Make in India’ dream come true,” she added.
Another key aspect the government is working on according to Dr Parmar is the implementation of a nationwide Goods and Services Tax this year, ending the inefficient practice of each state imposing its own tax as shipments cross state borders, significantly slowing the movement of goods. “It will boost GDP growth by 2-2.5 per cent and increase exports by 10-14 per cent.”