There have been new developments in the highly strategic Indian express market, this time involving DHL and the state-run India Post. It appears that the two companies are in negotiations to form some type of joint venture which would allow DHL to access India Post's huge distribution footprint reaching right across the vast geographies involved.

In exchange for this delivery network, India Post would benefit from DHL's superior technological and organisational capabilities. Although DHL already has a very significant presence in the market through its ownership of air express operator Blue Dart, its network is confined to urban areas. Nor does Blue Dart have a presence in the North East of the country.

In another sign that India Post is starting to take the express market seriously, the postal operator has also recently leased a Boeing 737-200 from Indian Airlines which will be dedicated to moving express consignments to the North East of the country with Kolkata acting as a regional hub.

Although all the major integrators have their sights set on the fast growing Indian market, its immaturity continues to present risks, especially its regulatory regime. There are presently plans being discussed by the Indian government to regulate all courier and express operators as well as impose a double-tax on them to fund the Universal Service Obligation (USO) of the Department of Posts. Such a move would be disastrous for the industry (as well as the Indian economy). However given that the integrators continue to position themselves for expansion in the market, there seems to be a belief that these plans will ultimately be shelved.