Even as India aspires to become a global air cargo and logistics leader, the country is facing competition from China, Thailand, Vietnam and Singapore, which are established regional powerhouses. For this, India has to modernise infrastructure, reduce costs and enhance efficiency to match global benchmarks.
Ritika Arora Bhola
Now that India is diversifying its markets and relying on other trade routes for exports and imports, following the imposition of 50 per cent US tariffs, stakeholders are gearing up to compete with South Asian nations, such as Vietnam, Thailand, Singapore and China, which are established players. As these nations seek to become global trade and logistics hubs, the million-dollar question is — can India match up to these competitors?
India has inherent advantages. Its geographical position, which puts the country at the centre of global cargo flows — provides access to eastbound and westbound trade routes. Coupled with a large domestic consumer base, a fast-growing manufacturing sector driven by Make in India, Production Linked Incentive schemes and increasing e-commerce penetration, India has the volumes to strengthen its logistics ecosystem.
The government’s initiatives such as the PM Gati Shakti (PMGS), Dedicated Freight Corridors (DFCs), MMLPs, SEZ, Bharatmala, Sagarmala and the National Logistics Policy (NLP) are driving infrastructural modernisation, multimodal connectivity and cost efficiency.
India faces stiff competition from its regional counterparts. China dominates global supply chains with its well-integrated logistics infrastructure, efficient ports and advanced air cargo hubs, such as Shanghai. Hong Kong, while Thailand and Vietnam, leveraging their manufacturing bases in electronics and perishables, have scaled up logistics services and offer faster, cost-efficient solutions. Singapore continues to be a
benchmark for world-class connectivity, technology adoption and efficiency.
India is still on its way to reaching a position that could rival its competition. With electronics and pharma exports increasing, manufacturing activities under the Make in India initiative on the rise and FDIs and trust increasing, India is likely to set a benchmark globally in the coming years.
India’s challenges lie in high logistics costs, currently between 13 and 14 per cent of GDP compared to 8–10 per cent in advanced economies, along with fragmented supply chains, limited cold chain capacity and procedural inefficiencies. With PMGS and NLP, logistics cost is likely to reduce to single digits in the coming months.
While major airports — Delhi, Mumbai and Hyderabad — are investing in cargo infra, India needs deeper digital integration, faster customs processes and improved last-mile connectivity to match global standards.
With global companies seeking China+1 strategies, India stands to attract investments in manufacturing and supply chains. Growth in pharmaceuticals, automotive, electronics and perishables will fuel volumes, while digitisation, sustainability measures and private sector participation can improve competitiveness.
In conclusion, the country is well-positioned to compete, but must accelerate reforms and invest in technology, infrastructure and skill development. While China, Thailand and others have cemented their place in the trade, India’s scale, demand base and initiatives give it the potential to emerge as a leading air cargo and logistics powerhouse in the coming decade.
CARGOTALK speaks to industry experts to discuss how attractive India’s cargo and logistics market is, compared to Southeast Asian competitors, and if India is ready to become a global logistics hub.
India offers lower costs, larger domestic market
Keku Bomi Gazder, CEO & MD, Aviapro Logistic Services
Compared to Southeast Asia, India offers a larger domestic market and lower labour costs. Its long-term potential remains strong as global supply chains diversify under the China+1 strategy, making India a favourable logistics hub with room for improvement. To become a global transshipment hub, India must invest in port infra, logistics efficiency and regulatory reforms. India should focus on creating SEZs to attract global manufacturers and logistics firms. Partnerships with international shipping lines and integration with trade routes can boost volumes.”
Upcoming ports show India’s infra capability
Prediman Koul, CEO, Jeena & Company
If we compare India with Southeast Asian nations, we offer a sizeable unified market, growing manufacturing under the Make in India and PLI schemes and rising consumption. These factors position India as a logistics hub for domestic needs and a gateway for global trade, making it a long-term choice for global supply chain diversification. With improved port infra and enhanced shipping link, India is poised to emerge as a global transshipment hub. It is prudent for India to develop logistics zones near ports, enable faster clearances, encourage PPPs and offer competitive transshipment tariffs.”
DFCs are an effort to increase rail freight
Afzal Malbarwala, MD, Galaxy Freight
Cargo volumes have rebounded so much that the air cargo market is now being seen as one of the most lucrative bets for freighter operators and other supply chain stakeholders across the world. In 2023–24, India saw a 7 per cent YoY rise in volumes handled by airports, while global loads spiked by 10 per cent. India is setting up expressways and highways to cut transport time drastically and improve connectivity with ports and airports. The DFCs are an effort to increase the share of rail freight and leverage the third largest rail network in the world to lower logistics cost to single digits.”
India must simplify customs procedures
Arun Kumar, President, AMTOI
India may have joined the race late, but it has the scale, demographic dividend and domestic demand many of its peers lack. With sustained focus, coherent policy implementation and PPPs, India could emerge as a global logistics hub. To become a global transshipment hub — a geographical location, world-class physical infra and facilitative regulatory framework are essential. With investment in ports, DFCs, MMLPs and improved connectivity, I don’t see what can stop India from becoming a global transshipment hub. If we simplify customs processes, India can surpass regional competitors.”
