The Noida Apparel Export Cluster (NAEC), where 80 per cent of apparel production and export units are classified as Micro, Small and Medium Enterprises (MSMEs), has urged authorities to allocate priority air cargo space for such local enterprises.
Their request comes amid escalating concerns over delays and surging freight costs attributed to the transhipment of Bangladeshi export cargo through Delhi’s air cargo complex.
The NAEC has proposed a 25 per cent quota reserved specifically for MSMEs, aiming to expedite shipments and mitigate the financial strain caused by a quadrupling of air freight rates over the past two months, according to exporters.
Last February, India permitted the Delhi Airport to serve as a cargo transhipment hub between Bangladesh and other export destinations, extending an existing policy previously limited to the Kolkata Air Cargo complex.
Lalit Thukral, President of NAEC, expressed concern that “The cargo slots at Delhi Airport are swamped with Bangladesh shipments, resulting in their exporters benefitting at the cost of Indian exporters.”
The ongoing crisis in the Red Sea has prompted a modal shift, with goods traditionally transported by sea, such as leather products, now being shipped by air, further exacerbating the surge in air freight demand.
Exporters report a staggering increase from Rs 35 per kilogram to Rs 140 per kilogram for air shipments to Europe over the past three months.
Ajay Sahai, Director General of the Federation of Indian Export Organisations (FIEO), acknowledged the issue, stating, “India has given transit facility to Bangladesh export cargo from Delhi Airport besides Kolkata. Simultaneously, air freight has also increased because of the geopolitical situation including Red Sea crisis. We have taken this up with commerce department as it has led to delay in export cargo particularly of MSMEs due to space constraints, on some of the busy routes, in regular flights.”
The Apparel Export Promotion Council (AEPC) has gone a step further, advocating for the suspension of the transhipment facility extended to Bangladesh. Thukral added, “Textile exporters in Bangladesh already receive several benefits such as subsidies from the government and have preferential treatment under the free trade agreements. The transhipment policy has further compounded the situation for Indian exporters.”