India’s air cargo sector is set for exponential growth, aiming to generate $6 billion annually by 2030, leveraging advanced technology, sustainability, and government initiatives. This transformation supports India’s $26 trillion economic aspiration by 2048.
Transformative growth in air cargo
The air cargo industry is evolving rapidly, fuelled by technological innovations, sustainability measures, and changing market demands. In India, the sector is pivotal to the country’s ambition to become a $26 trillion economy by FY’48. Projections indicate the industry will generate $6 billion annually by 2030, supported by e-commerce expansion, high-value goods, and pharmaceuticals. Sustainability initiatives, such as green logistics and sustainable fuels, could save $1.2 billion annually by reducing logistics costs by 20 percent. Government infrastructure investments and technology adoption promise to handle up to 2 million consignments annually by 2030, positioning India as a global logistics hub.
Expected developments
- Technological integration: Emerging technologies like AI, IoT, and blockchain are transforming air cargo operations, improving transparency and efficiency.
- Sustainability and innovation: Developments such as electric aircraft, renewable energy utilisation, and circular economy practices aim to reduce emissions while enhancing operational effectiveness.
- Market dynamics: The rise of e-commerce, expected to reach $350 billion by 2030, demands advanced logistics solutions, including temperature-controlled shipping and faster deliveries.
Cost management
Efforts to optimise costs are crucial for industry competitiveness. Value chain optimisation and efficient fleet management are projected to reduce logistics costs from 14 percent of GDP to 9 percent. Shared logistics infrastructure and innovative collaborations can further enhance affordability and service quality.
Green logistics measures
Sustainability drives air cargo innovation. Adopting sustainable aviation fuels (SAF) and exploring liquid hydrogen could significantly reduce carbon emissions. Electric aircraft and renewable energy use in operations align with global environmental goals, while circular economy practices ensure resource efficiency.
New services
Innovative solutions address evolving customer needs. Temperature-controlled shipping and real-time tracking ensure product integrity and visibility, vital for industries like pharmaceuticals. Enhanced airport infrastructure and digitalisation enable faster, more secure, and customised logistics solutions, contributing to economic growth and global trade.
Economic contributions
- Trade and Growth: Air cargo accelerates trade by transporting high-value goods swiftly, directly contributing to GDP growth and foreign investments.
- Infrastructure Investment: India needs an additional 7,530 metric tonnes of cargo capacity, requiring $25.94 billion over the next two decades. Liberalised air services and reduced corruption can attract foreign investments.
- Policy Support: Government initiatives like the National Logistics Policy aim to reduce logistics costs to 8 percent of GDP, making India a competitive global trade partner.
- Sustainability: Green practices strengthen India’s position as an environmentally responsible trade hub.
India’s air cargo industry is on the brink of transformative growth, driven by technological innovation, sustainability, and market adaptability. By addressing cost efficiency and infrastructure needs, it is set to bolster global trade, advance economic development, and establish India as a leading player in international logistics.
(Insights by Apeksha Gupta, Head, VCJ Foundation and Trust, References: Budd & Ison, Journal of Air Transport Management (2017), Lo et al., Transportation Research A (2015), Ganesh & Gajanand, Indian Logistics Industry (2018), Grandview Research (2023)
