India’s Air Cargo Landscape: Navigating Toward Global Standards

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India stands at a significant crossroad in its journey as a leading air cargo hub. This article delves into the pressing need for India to align its air cargo policies and infrastructure with global best practices to harness its full potential in logistics.

The Current State of India’s Air Cargo Sector

India has emerged as one of the world’s fastest-growing air cargo markets. It now ranks as the third-largest aviation market and the sixth-largest air cargo hub globally. The sector not only supports 7.7 million jobs but also contributes a whopping US$53.6 billion to GDP, accounting for roughly 1.5 percent of the nation’s total economic output. However, these impressive statistics do not tell the full story of the underlying structural challenges faced by the industry.

Fiscal Frictions and Investment Deterrents

One of the primary concerns hindering growth is fiscal unpredictability, particularly concerning tax enforcement. Recent retrospective tax demands on international airlines, along with disputes related to the Goods and Services Tax (GST), have raised eyebrows. The International Air Transport Association (IATA) has voiced these concerns, emphasizing that convoluted tax measures undermine capital planning and threaten route viability.

In response, IATA is advocating for India to align its tax framework with international conventions to provide foreign operators the certainty needed for potential investments.

Infrastructure Lagging Behind Growth

While major investments are being channeled into terminals and airports—particularly in projects at Noida and Navi Mumbai—stakeholders argue that there is a critical need for cargo-specific facilities to meet the unique demands of freight operations.

Facilities like cold-chain storage and modern customs systems are often sidelined during developmental planning. It is imperative that the blueprint for future airport projects incorporates these necessities from the onset. Notably, the Airports Economic Regulatory Authority (AERA) has recently proposed performance-linked tariff structures, which could arise as a step in the right direction for enhancing infrastructure.

Airspace Congestion and Limited Access

On the operational side, issues are escalating in the air as well. Slot allocation at major hubs, including Delhi and Mumbai, continues to restrict freighter access. IATA acknowledged improvements in slot governance at Mumbai International Airport, yet broader airspace congestion remains an ongoing challenge. Notably, in April 2025, there was a substantial 25 percent surge in traffic over the Arabian Sea corridor, indicating an urgent need for regional coordination in airspace management.

Sustainable Initiatives in Aviation Fuel

The focus on sustainability is growing, with Sustainable Aviation Fuel (SAF) becoming a hotspot on IATA’s agenda. Given that India is already the third-largest ethanol producer in the world, the country has the potential to lead in SAF production. Both Air India and Indian Oil have joined compliance frameworks, but regulatory clarity remains elusive, delaying domestic production until at least 2026. IATA is pushing for swift adoption of various systems to kickstart this process, emphasizing that without policy coherence, the freight sector risks falling behind.

Digitization in Logistics: A Double-Edged Sword

The digital landscape of India’s logistics sector is gaining traction through initiatives like DigiYatra і Unified Logistics Interface Platform (ULIP). However, execution has been inconsistent, particularly in air cargo. IATA advocates for full-scale adoption of the e-Air Waybill and expedited deployment of the ONE Record framework to enhance data sharing and shipment visibility.

According to officials from the Ministry of Civil Aviation, it’s time for digital air cargo standards to be embedded into India’s logistics master plans to mitigate fragmentation in customs digitization.

The Need for International Legal Alignment

Beyond domestic reforms, the necessity for international legal alignment cannot be overstated. IATA is urging India to ratify the Montreal Protocol 2014 to improve global aviation safety standards. For air cargo operations, adhering to international standards like ICAO Annex 9 is critical as it would streamline cross-border compliance and position India effectively as a logistics bridge connecting Europe, the Middle East, and Southeast Asia.

Conclusion: Bridging Opportunities in Logistics

India’s trajectory in air cargo highlights an intricate balance of potential and challenge. From navigating tax reforms to enhancing infrastructure and aligning policies with international standards, the journey ahead is multifaceted. Each reform and initiative harmonizes with GetTransport.com’s mission to facilitate affordable global cargo transportation solutions. By addressing these strategic inflection points, stakeholders can ensure that India not only catches up with global logistics standards but leads the way. GetTransport.com stands poised to simplify the logistics landscape, ensuring secure, reliable transport for varied needs, be it office moves, hefty furniture deliveries, or many other logistics challenges. For a seamless, cost-effective transportation experience, residents and businesses alike can rely on the services offered by GetTransport.com.

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