Domestic air cargo: eCommerce is the key to growth

Despite the global recession, domestic air cargo is growing faster than international air cargo and is expected to surpass the international cargo by approximately 400 mmt. This, despite the fact, that the sector has not received basic amenities such as planned infrastructure and heavy service tax to name a few. CARGOTALK speaks to a few domestic players to know the needs and requirements of the sector.

Suraj Agrawal President, DACAAI

There is a reasonable growth of around 15-20 per cent in domestic air cargo sector. We believe growth is more due to the boom in eCommerce sector to meet commitments with the end consumer. But due to lack of proper infrastructure, unavailability of sufficient space and required equipment, lack of proper ground handling, there is delay in connection and utilisation of flight space.

Cost of terminal charges and freight are also on the higher side. Levi of service tax of 14 per cent also adds to cost. Other modes of transport such as road and rail have abatement of 70 per cent and in international cargo tax is not even applicable.

Unfortunately till date, the Government has considered air cargo only as international cargo. But now, with efforts by Domestic Air Cargo Agents Association of India (DACAAI), the Government has started thinking about the needs of domestic cargo too. DACAAI has submitted a detailed report to MoCA and AAI on the ideal terminal requirement. It has put forward demands to MoCA to form a separate forum to resolve the issues of this sector.