The Indian air cargo industry is expected to soar in the next three to four years with the economy on a solid growth trajectory and the 'liberalisation' of the aviation sector in the works.
However, much work on infrastructure needs to be done towards achieving this goal, said a market research report by Frost & Sullivan.
There is rising optimism that India will emerge as a new cargo hub, given its geographical location between South-East Asia and the European Union, according to the analysis. The report highlighted that the country's air cargo market was expected to grow at a compounded annual growth rate (CAGR) of about 8.3 per cent by 2013.
"Increasing globalisation, integration of the world economy, and the strengthening of India in the IT service provider space has resulted in a booming Indian economy," said the report's authors, analysts Mr Arun Narayanan and Mr Chethan Kambi. "This has increased the aggregate demand and is an important driver for air cargo services."
The market is expected to receive a further boost with the recent raising of FDI limits up to 74 per cent in Indian cargo airlines. Such proactive and favourable government policies will greatly encourage investments in the air cargo industry and facilitate the setting up of the required amenities and infrastructure. It will also help establish multimodal cargo hubs for quick and efficient transportation of cargo, the report stressed.