Indian air cargo industry stakeholders, especially those boasting priority delivery expertise, have reason to smile, for the much-hyped US trade deal promises fresh growth opportunities.
New Delhi plans to source US products worth some $500bn over the next five years, with aircraft and aircraft parts at the centre of the partnership, and industry sources believe the heightened focus will open tremendous demand for AOG (aircraft-on-ground) and aero parts logistics.
Broadly, India has agreed to eliminate or reduce tariffs on all US industrial goods, while US tariffs on Indian exports have been lowered to 18% from 50%, which included the 25% penalty for Russian oil sourcing that had been the subject of controversy. Lower tariffs took effective 7 February, though a comprehensive formal deal is unlikely to inked before early March, according to the latest update.
MRO (maintenance, repair and overhaul) verticals for the aviation sector are already on the cusp of rapid expansion in India, with Boeing and Airbus targeting the country as a hub for aircraft parts manufacturing and service. According to available data, Indian sourcing towards components and services is already significant for both – estimated at some $1.25bn for the American manufacturer and $1.4bn for the French aircraft maker, and it aims to expand that to some $2bn by 2030.
As the overall trade outlook brightens, niche AOG forwarders are now betting on accelerated imports of aircraft parts and components as the MRO sector expands.
Jitendra Srivastava, CEO of Mumbai-based Triton Logistics & Maritime, said: “With India ordering over a thousand aircraft and companies like Boeing deepening their footprint, inbound air cargo volumes of spares, engines and high-value components will rise sharply.
“As trade volumes scale between India and the US, airlines gain stronger belly cargo economics, improving route viability and frequency, which will ultimately transform air freight from a premium option to a strategic backbone for India’s next phase of trade growth.”
Vineet Malhotra, co-founder and director at Mumbai-based Kale Logistics Solutions, also believes the Indian air cargo industry has a lot to look forward to from the trade deal.
“This agreement will not only enhance cost-efficient movement of critical components, but also accelerate digital and data-driven supply chain orchestration across borders,” he told The Loadstar.
Kale, a speciaist in air cargo community systems service, also expects significant tech advancements as speed and reliability become “table stakes” for shippers targeting time-critical aircraft-related cargo movement.
AOG logistics involves daunting challenges due to tight delivery timelines and regulations, but the market is economically lucrative for stakeholders, sources believe.
Currently, Mumbai, Delhi, Cochin and Hosur are the major hubs for MRO service in India. And there are already unconfirmed reports that New Delhi had signalled its readiness to place new aircraft orders worth some $80bn with Boeing.
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