India's domestic cargo registers 8% CAGR in 10 years

05 Sep '17

2 min read

India’s domestic cargo registered a compounded annual growth rate of 8 per cent between fiscals 2006-07 and 2016-17, whereas international cargo grew at 6.2 per cent annually during the same period, says a study by Yes Bank and the Associated Chambers of Commerce and Industry of India (ASSOCHAM). The air trade to GDP ratio doubled in the last 20 years.

The ratio rose from 4 to 8 per cent in 20 years. Air cargo contributes about 20 per cent of airlines revenue and the industry employs around 70,000, according to the joint study on civil aviation released recently in New Delhi by ASSOCHAM. The growth of the industry will be driven by auto components, banking & finance, garments, pharmaceuticals, e-commerce and IT hardware sectors.

The study suggests that air cargo be treated at par with other logistics sectors like roads and its tax rate may be reduced from 18 per cent.
As the air cargo sector is fragmented and air traffic is concentrated at only a handful of airports, the challenge is to connect cargo volumes of tier 2 and tier 3 cities with major cities.

To increase capacity of the existing players, airport infrastructure should be integrated with air cargo facilities and dedicated unused infrastructure at airports may be marked to air cargo operators, the study says.

Substantial investment is needed to develop dedicated on-airport cargo terminals and air freight stations to handle air cargo across the country.

To develop transshipments, customs and security policies and procedures for transhipment need to be standardized at various airports. A proper plan should also be made to connect rail cargo with air cargo, the study adds. (DS)

Fibre2Fashion News Desk – India

More The Associated Chamber of Commerce & Industry of India News... More Textiles News - India...