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            september 22, 2017

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Indiaexportnews.com

India's domestic cargo grows 8pc as international freight rises 6.2pc

  13.09.2017    

India's domestic cargo volume achieved a growth of eight per cent a year, while international volume rose 6.2 per cent year on year, a joint ASSOCHAM-Yes Bank study on civil aviation revealed.
In India, air trade to GDP ratio has doubled from four per cent to eight per cent over the past two decades, with air cargo contributing about 20 per cent to the revenue, reported Delhi's Odessa Media.
The study said that air cargo should be treated on par with other logistics sector like roads which is subject to a five per cent tax rate. They recommended that the air cargo tax rate be reduced from 18 per cent.
The Indian express cargo industry that provides fast, reliable, on demand, integrated and door to door services (including customs clearance and duty and tax payments) is likely to grow many fold in coming years.
The growth of the industry will be driven by the current major customer segments, namely auto components, banking and finance, garments, pharmaceuticals, IT hardware and mobile phones, and e-commerce, the study said.
The opening of India's economy, entry of new airlines, new routes, reforms in government policies, advanced technology has helped Indian air cargo to grow.
But the air cargo sector in India is still fragmented and faces certain challenges, particularly as air traffic in the country is mainly concentrated at only a handful of airports.
The challenge lies in connecting cargo volumes of tier two and three cities with major cities for air transport, which lack appropriate cargo infrastructure, the study notes.
In order to provide scope of capacity addition to the existing cargo players, it is necessary to integrate airport infrastructure with air cargo facilities. Dedicated unused infrastructure at airports may be marked to air cargo operators.
The study points out that inbound freight demand is not very strong and is not enough to fill up the aircraft but that is not the case with exports which see much higher utilisation. As a result of intense competition, export rates have been low. Hence, airlines are finding it tougher to turn a profit to keep India on their route.
Substantial investment is needed to develop dedicated airport cargo terminals, air freight stations, to handle air cargo across the country. Advances in technology and the implementation of security systems also need to be pursued.
Indian airports enjoy a geographical advantage, owing to their strategic location. But the transshipment route has not been fully exploited. In order to develop transshipments, customs and security policies and procedures for transhipment need to be standardised at various airports, the authors of the study added.



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