To achieve aviation policy target, air cargo industry must grow at 12.9% annually

India's cargo industry needs to grow at about 12.9 per cent every year to achieve the National Civil Aviation Policy vision of reaching 10 million tonnes (MT) cargo volume by 2027, says a report.

"There is an urgent need to uplift Indian cargo market to achieve the overall vision of the aviation ministry," observed the joint study by Assocham and consultancy firm Auctus Advisors.

The report suggested implementing a rating system for cargo terminals in-line with ASQ (Airport Service Quality) ratings at passenger terminal to motivate operators to improve infrastructure and provide superior quality of services.

"The Indian cargo industry needs to grow at a rate of about 12.9 per cent every year from 2018 to 2027 to achieve National Civil Aviation Policy (NCAP 2016) vision of reaching cargo volumes of 10 million tonnes (MT) by 2027," it said.

The report noted that there is an urgent need for creating adequate freight carrying capacity within Indian air network through creation of new cargo terminals and expansion of the existing ones, besides undertaking pro-active measures to identify tier-2 and tier-3 cities for setting up common user domestic cargo terminal (CUDCT).

The study suggested introducing a separate comprehensive air cargo policy to reduce bottlenecks in freight movement.

As per data maintained by the Airports Authority of India (AAI), air freight handled at Indian airports grew by more than 20 times from 0.08 million metric tonnes in 1972-73 to 2.5 million tonnes in 2014-15, and its compound annual growth rate (CAGR) was 8.8 per cent during 2013-14 to 2016-17.

The report said that international and domestic air freight is projected to grow at an overall compounded annual growth rate (CAGR) of 8.2 per cent.

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"Considering this trend to continue till 2027, projected international and domestic air cargo will be 3.6 MT and 2.1 MT, respectively, resulting in total air cargo traffic of 6.8 MT," it estimated.

The study also highlighted various issues confronting aviation logistics sector in India - lack of enabling infrastructure, lack of automated material handling systems, high manual intervention in the processes and inadequate skilled manpower are some of the key areas where Indian air cargo industry lags global peers.

On development of air freight station (AFS), the study said there is an urgent need for a clear cut, well-defined policy to initiate AFS ecosystem which would help in stimulating export-import trade.

"Promoting concept of cargo villages and linking them with international airports is an ideal way to boost air freight traffic, improve delivery and create many job opportunities. Besides, cargo villages may also be linked to free trade zones to foster goods' manufacturing for international markets which would give a boost to ?Make in India,' scheme of the government," said the report.