A renewed focus

Fuelled by government and legislative initiatives and a spurt in infrastructure, India’s air cargo business aims to become all the more lucrative for top international players from the aviation sector.

With India’s logistics sector set for exponential growth, led by economic revival, impetus to transport infrastructure, foray of e-commerce and the impending GST implementation are expected to bring about a transformational change in the country’s fortunes. This shall also have implications on the country’s air cargo business.

The three-day Federation of Freight Forwarders Association of India (FFFAI) event, taking place in the city after 14 years, was inaugurated by Maharashtra Chief Minister, Devendra Fadnavis.

The event by the FFFAI, that controls 90 percent of India’s international logistics trade, is considered to be the most important event in the industry, with widest participation from the stakeholders in the export-import (EXIM) trade. The event also emphasised on the changing dynamics of the air cargo business.

Impetus on bilateral trade
With a focus on ‘Make in India’ and the impending implementation of GST, India is expected to ease its manufacturing and logistics woes. As India embarks on a massive manufacturing activity and is developing dedicated freight corridors as well as giving boost to inland waterways and coastal shipping, the freight forwarders, an important stakeholder in logistics industry, are gearing up to seize the opportunity. This shall also have implications on India’s air cargo business, being that India is the largest air cargo market in the South Asian region, but very few airlines based out of the country have dedicated air freight services.

However, things are changing; Jet Airways announced in March that it has plans to launch freighter services, becoming the first private Indian passenger airline to offer all-cargo services. Other top international carriers are also eyeing the lucrative Indian air cargo business and the implementation of these initiatives shall spur the foray of international players.

Guruprasad Mohapatra, Joint Secretary, Ministry of Commerce highlighted that the bilateral trade between India and Commonwealth of Independent States (CIS) region has increased from $8,346 million in 2010-11 to $11,054.million in 2014-15. FFFAI on behalf of Ministry of Commerce conducted a successful dry-run study on International North South Transport Corridor (INSTC). The activation of the corridor will help reduce dwell time and transaction costs by connecting India to Russia within 16-21 days at competitive freight rates leading to development of trade in the INSTC.

Amit Kamat, Honorary Secretary, FFFAI Convention asserted, “FFFAI is working actively to provide the requisite mindset, skill, technological roadmap and develop execution ability to handle the next growth curve in economy. This will help in reduction of transaction cost and provide efficient movement for manufactured products within & outside country.”

Blueprint for change

  • Technological augmentation: A mandate for the documentation and information flow in international trade including the use of phone apps for bill of entry/shipping bill and the advent of concepts such as a smart cities, smart ports, smart borders among other things to ease international trade.
  • Change in trade dynamics: With more merger and acquisitions expected to happen, the global trading landscape is expected to change drastically.
  • Advancements in manufacturing approaches: With India expected to open up silicon fabs for manufacturing transistors to the advent of ‘Subtractive manufacturing’ and better legislative policies is expected to ease the hassles for setting up a business in India. This would allow it to become a manufacturing and export hub.
  • Better infrastructure: With investments in infrastructure and composition of various modes of transport triggering change in velocity of trade. Thus, facilitating a long term vision for infrastructure and transport growth.
  • Change in level of Government facilitation with focus on Single Window concept due to international bilateral and multilateral trade agreements and also increased compliance of non-tariff barrier and allied laws.

Ergo, India’s logistics sector is set for expotential growth, led by GDP revival