India’s air cargo market is expanding at a pace few global peers can match, driven by surging e-commerce, electronics manufacturing, pharmaceuticals and time-critical exports. Yet, paradoxically, most Indian cargo carriers are struggling to capitalise on the boom, constrained by limited fleets, high costs and structural bottlenecks that continue to ground capacity growth.
According to industry estimates, India’s air cargo volumes have grown in double digits over the past two years, supported by stronger exports, rising express shipments and government incentives under the Production Linked Incentive (PLI) schemes. Major gateways such as Delhi, Mumbai, Bengaluru and Hyderabad are reporting record throughput, while new international routes are being added to connect Indian exporters with North America, Europe and East Asia.
Despite this momentum, India still has a very small dedicated freighter fleet. The bulk of air cargo continues to move in the belly holds of passenger aircraft, making capacity vulnerable to passenger demand cycles, route economics and seasonal fluctuations. Only a handful of operators run pure freighters, and even these fleets remain modest by global standards.
Industry executives point to high aircraft acquisition and leasing costs, volatile fuel prices and steep airport charges as major hurdles. “Operating freighters in India is capital-intensive, and margins are thin,” said a senior cargo airline executive. “While demand is strong, the cost structure makes it difficult to scale quickly.”
Infrastructure constraints are another challenge. Although cargo terminals have expanded, exporters complain of congestion, uneven cold-chain availability and delays in customs processing at several airports. These issues are particularly acute for pharmaceuticals, perishables and high-value electronics, sectors that are otherwise driving air cargo growth.
At the same time, foreign carriers are capturing a significant share of India’s international air cargo traffic. Large Middle Eastern, European and East Asian airlines, operating extensive freighter fleets and widebody passenger aircraft, are able to offer more frequent services and competitive rates. This has left Indian carriers at a disadvantage on long-haul routes, even as domestic volumes rise.
The government has taken steps to address some of these gaps, including policies to promote multimodal logistics, digitisation of customs processes and the development of air cargo hubs. However, industry players say targeted support for freighter operations—such as rationalised airport charges, easier access to aircraft leasing and incentives for cargo-focused airlines—will be critical if Indian carriers are to fully participate in the sector’s growth.
With India positioning itself as a global manufacturing and export hub, air cargo demand is expected to remain strong over the medium term. The question is whether domestic carriers can get airborne fast enough to seize the opportunity—or whether the boom will continue to lift volumes while leaving most Indian cargo operators firmly grounded.
