News / Indian exporters call for more trade deals as airfreight market to US plummets

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Indian air freight stakeholders appear to be battling serious demand headwinds out of India for US routes amid the tariff flux, industry updates suggest.

The market deceleration from the impact of 50% tariffs that hit Indian exporters effective 25 August is rapidly reversing the growth seen on the tradelane in the recent past.

To illustrate, the latest analysis by WorldACD put the downturn at some 14% in Week 36 through 7 Sept., sharpening from the 12% drop in the previous week.

WorldACD also said spot air freight rates from India to the US fell below the $4 per kg mark for the first time in several months, down to $3.99/kg in Week 36, reflecting a 22% drop year on year.

“In contrast, air cargo volumes from India to Europe have been rising steadily in the last three weeks, taking them +8% higher than in week 36 last year,” it noted.

Local air cargo industry voices have echoed WorldACD’s pointers on the volatile market environment.

Satish Lakkaraju, CEO at Hyderabad-based Garudavega-Nexgen Logistics, told The Loadstar the elevated tariffs have brought an unprecedented slowdown into the India-US export corridor.

“The recent tariff changes have created a ‘wait-and-watch’ sentiment among exporters, particularly in sectors like garments, where large orders are being cancelled or deferred,” said Mr Lakkaraju, who is also a board member of the Air Cargo Forum India (ACFI).

“In our business, which is predominantly C2C, we are seeing customers reduce shipment sizes significantly,” he explained.

According to him, the double-whammy of the de minimis withdrawal and higher tariffs has fuelled a sense of scepticism among customers.

“There is an urgent need for clarity, dialogue and stability on trade policies so that exporters, logistics providers and customers can plan with confidence and maintain the strong India–US trade relationship,” Mr Lakkaraju added.

Jitendra Srivastava, CEO of Mumbai-based logistics service provider Triton Logistics & Maritime, however believes the market pressure for Indian air cargo players due to tariffs will be short-lived.

“Trade is adaptive…it just shifts to Europe, the Middle East and other growth corridors,” Mr Srivastava said.

“The trajectory for India’s air cargo is still up.”

While export market diversification is gaining priority at various levels, the challenges facing Indian labour-intensive industry verticals to win new customers are daunting, sources agree.

“Market development won’t happen so easily or overnight,” one industry observer told The Loadstar.  “More strategic free trade bilateral agreements are the need of the hour.”

The Federation of Indian Export Organisations (FIEO) recently said about 55% of India’s US-bound shipments could be in jeopardy because of the tariff blow, thus wiping out some $48bn worth of merchandise trade by value.

According to FIEO, textiles and apparel manufacturers in the larger industrial clusters of Tirupur, Noida and Surat would be forced to cut production or even shutter factories as they brace for shipment suspensions and widespread order cancellations.

“This sector is losing ground to lower‑cost rivals from Vietnam and Bangladesh,” FIEO said.

“While for the seafood  – especially shrimps – the US market absorbs nearly 40% of Indian seafood exports and the tariffs increase risks of stockpile losses, disrupted supply chains and farmer distress.”

And Sudhir Sekhri, chairman of the Apparel Export Promotion Council (AEPC), reiterated that concern.

“Our industry is already experiencing the effects of the tariff hike, with potential losses and order cancellations,” Mr Sekhri said.

“We are exploring alternate markets and strategies to mitigate the impact of the US tariffs.”

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