Can India lead Southeast Asia in air cargo?
At the recently-held ACFI conference in New Delhi, panellists deliberated on the potential India held to be a kingpin in Southeast Asia for air cargo. The odds, it concluded, stood to its advantage.
Air Cargo Forum India (ACFI) recently held a conference on ‘India – Future Air Cargo Leader in South East Asia’ in New Delhi. The conference brought together ministry officials and expert speakers from India and abroad, to debate on the national air cargo policy outlined and circulated by the government. The chief guest for the conference was Pradeep Singh Kharola, IAS, Secretary, Ministry of Civil Aviation, Government of India.
Commencing the session, Yashpal Sharma, Managing Director, Skyways Air Services, said, “The global aviation industry is on a high growth trajectory and has ushered in an era of rapid expansion. India has already ‘arrived’ and is on the path to becoming the third fastest growing economy, which will consequently fuel the Indian aviation industry to take giant leaps and possibly become the third largest market by 2030, both in terms of passenger numbers and for cargo.” He added that air transportation was a premium and indispensable part of world trade today, even though it carried only one per cent of the globe trade by volume. However, in terms of value, it enjoyed a 35 per cent share. “Last year, air cargo carried around $6.8 trillion worth of goods. The Indian air cargo industry stands at approximately 3.3 million tonnes today and has a huge potential to play a lead role not only in India but in all of Southeast Asia, which can become one of the largest manufacturing hubs over the next few decades.”
Sharing his point of view, Tushar K Jani, President, ACFI, said, “India is close to being third in terms of growth in civil aviation globally, and we have an opportunity to gain a similar rank in cargo. The country enjoys the advantage of being strategically located. To make India an efficient logistics hub, we need robust consumption and manufacturing, and India has both. High consumption and a huge manufacturing sector supported by initiatives like Make in India and other major initiatives in exports being conceptualised are proving their mettle.”
Describing the Indian consumption and manufacturing pattern, Jani added, “If we move from Chennai (which is manufacturing) to Bengaluru (that becomes consumption) to Mumbai (consumption and manufacturing), then to Ahmedabad (which is consumption) and further north to Delhi (which is high consumption) and finally touch Kolkata (which is high consumption), we can plot a crescent-shaped path. Now, along this crescent, we need to identify regional hubs such as Mumbai (West), Delhi (North), Chennai (South), Kolkata (East), and other cities like Bengaluru and Hyderabad.”
Vandana Aggarwal, Economic Advisor, Ministry of Civil Aviation, Government of India, shared, “In the last few years, we have emphasised on the fact that the entire value chain is important, and we cannot work in silos.” She added that one of the major developments the ministry had brought in was an outline for the national air cargo policy, every word of which was written in consultation with the industry. Highlighting the potential the country held for being an air cargo leader in the region, she said, “Here, we made a mark by taking up an important initiative in a short span of about two weeks with our partner Bangladesh. In October, we had a meeting and decided that Dhaka was completely choked and Chittagong airport was facing issues. How then could we partner with Bangladesh? To make it a winwin situation for both countries, we initiated the land bonded
truck movement from Dhaka to Benapole and Petrapole, and onwards from Kolkata to Europe and the rest of the world. It was an important land-air movement and more than 400 tonnes under the pilot project have already begun to move. More importantly, cargo movement, which used to take 27 days to reach Europe, is now reaching there in less than four days. Taking cues from this initiative, I believe that we would reach out to other partner countries in Southeast Asia.”
She added that the Ministry of External Affairs had entered a trilateral agreement with Myanmar and Thailand, and the bonded trucking potential used in this trilateral partnership could pave the way for improved trade with landlocked countries in Southeast Asia. “We need to address the balance between on-airport and off-airport cargo processing facilities. For a country the size of India, there has only been 3.34 million tonnes of air cargo movement. Being a supplier and a consumer nation, we should be able to do more. We clearly need to find what is stopping us,” she emphasised.
Speaking of the growth potential of the Indian air cargo logistics industry, Ramesh Mamidala, CEO, Çelebi Delhi Cargo Terminal Management India, stressed on the importance of SWOT analysis of the air cargo industry. He said, “Both infrastructure and IT have been identified as weaknesses in SWOT analysis, but we also see IT as an enabler. So, on the opportunity side, we have seen a number of great ideas such as blockchain, Artificial Intelligence (AI), Big Data, drones, market liberalisation, etc., and India is adopting many of these technologies. These ideas would act as enablers of the growth of the industry.” He also shared that two of the biggest challenges for the air cargo industry were real-time data exchange and single entry of data. “Given the fact that we have multiple stakeholders in the chain, data across the supply chain is creating issues. These two challenges, we believe, can be resolved with the adoption of Artificial Intelligence. More importantly, across the supply chain, managing inventory intelligently by predicting customer behaviour before the customer decides to purchase or makes the purchase, would significantly improve the efficiency of the supply chain. AI can bring this predictability in customer behaviour,” he added. Adding to the compendium of opinions, Keku Bomi Gazder, CEO, AAICLAS, said, “There were several challenges before us while drafting this policy outline. One was to see whether this policy was relevant and till when it would continue being relevant. The second was that the policy had to be given a fine-printed time frame, one that ensured targets set out in the policy were measurable. We wanted to understand what the ultimate customer wanted. Defining a customer is one part, but understanding what a customer wants from the industry was a challenge.”
Sharing his concluding remarks on the air cargo policy, Amber Dubey, Partner, KPMG India, said, “It needs to be even more granule. It is good that this is an outline and not the policy, which should include clear numbers and specific actions.”
The air cargo policy needs to be even more granule. It is should include clear numbers and specific actions