News / Market chaos and rising costs threaten India's airfreight ambitions

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Indian air freight stakeholders are reporting a chaotic market following the disruption to airline services across the Middle East. 

According to industry sources, available cargo capacity from India to the Middle East has dropped to critically low levels, driving freight rates sharply higher. 

“Air freight rates are again peaking,” Joy John, head of commercial for India at Air Menzies International, told The Loadstar. 

He also warned that rising fuel prices were likely to keep rates elevated, with shippers of perishables expected to be among the hardest hit. 

Mr John said air freight capacity on the India–Middle East corridor had fallen to roughly 20% of normal levels, as airlines continued to battle significant scheduling disruptions. 

Pradeak Krishnamurthy, joint MD of Chennai-based Ligi Logistics, noted that spot rates were fluctuating daily – or even more frequently. He added: “Much of the regional airspace remains restricted or closed, forcing airlines to reroute flights along longer paths.

“This has significantly reduced available capacity and increased operational costs.” 

Mr Krishnamurthy added that even European carriers had to implement major schedule adjustments due to extended flight routes. And with capacity and scheduling under such strain, airlines were increasingly adopting a “cherry-picking” approach, prioritising premium cargo loads, he claimed. 

Vineet Malhotra, co-founder and director of Mumbai-based Kale Logistics Solutions, added: “In such volatile conditions, real-time visibility, predictive planning, and seamless co-ordination across stakeholders enable operators to adapt quickly to route changes, manage capacity constraints and maintain compliance – ensuring essential cargo continues to move while sustaining customer trust.” 

Gulf carriers have traditionally held a formidable position in India’s international air cargo market, accounting for roughly a quarter of total capacity.  Emirates SkyCargo, Etihad Cargo, and Qatar Airways Cargo command the largest share, according to available data. 

At the Air Cargo India  event in Mumbai two weeks ago, cargo airline sources, particularly from Emirates SkyCargo, sounded bullish about the outlook for India’s air cargo market, despite the rising geopolitical risks. 

For example, Emirates announced plans to add freighter capacity to increase its weekly services from India from three to five, with two flights from Mumbai and three connecting Ahmedabad. But the fate of this push is now in limbo. 

“India is a powerhouse of manufacturing, pharmaceuticals, perishables, and ecommerce, and demand for reliable, stable capacity continues to grow,” said Badr Abbas, divisional SVP at Emirates SkyCargo, at the event. 

India aims to handle 10 million tonnes of air cargo annually by 2030, nearly triple the current volume of 3.5m tonnes. However, industry sources believe any sort of prolonged capacity disruption and disrupted trade flows could jeopardise this ambitious target.