Mobile Industry Calls for Expanded Air Cargo Capacity to Boost Exports

The Indian mobile phone industry is urging the government to enhance air cargo handling infrastructure to support a projected eight-fold increase in smartphone exports, expected to reach USD 180 billion by 2030. The call, made by the India Cellular and Electronics Association (ICEA), highlights the urgent need for expansion as current airports are nearing full capacity.

Pankaj Mohindroo, Chairman of ICEA, emphasised that the turnaround time at customs is a significant bottleneck for the electronics sector, delaying shipment processing. "In China, the factory-to-export process starts on Day 1, while in India, it only begins on Day 2. This gap is particularly concerning given the vast difference in export volumes between the two countries," Mohindroo said, pointing out that China’s electronics exports total $959 billion, over 30 times India’s $29 billion in 2023.

Electronics already lead India’s air cargo exports, ranking second overall behind engineering goods and petroleum. To meet the ambitious export targets, ICEA stresses the need for significant upgrades to airport infrastructure, as current facilities are operating at near 100 per cent capacity. Mohindroo noted that expanding existing airports and developing new ones is essential to accommodate the expected export surge.
In the 2023-24 financial year, India’s total electronics exports amounted to $29.1 billion, with mobile phones contributing USD 15 billion. To reach the target of USD 500 billion in electronics production by 2030, Mohindroo warns that the country’s air cargo capacity must increase substantially. The growth in electronics exports will also make them a dominant force in India’s air cargo sector, surpassing other exports in volume.

Currently, Delhi’s airport handles 55 per cent of India’s mobile phone exports, while Madras (30 per cent) and Bangalore (10 per cent) airports manage the remainder. However, Mohindroo highlighted that many airports lack sufficient space for crucial cargo operations such as docking, truck parking, and loading/unloading, which complicates logistics for electronics, sensitive to temperature and weather conditions.
Additionally, the ad-hoc nature of customs processing by brokers exacerbates delays. To address these challenges, ICEA calls for more structured procedures and faster clearance times.

The Indian government’s plan to build 50 new airports in the next five years is a crucial step toward improving air cargo capacity. Recent proposals from the commerce ministry include tax incentives, reduced aviation fuel prices, and infrastructure development to support air cargo. Mohindroo also pointed to developing new airports, such as the Noida International Airport and greenfield airports in Tamil Nadu and Maharashtra, as vital to boosting exports. Notably, Apple and Samsung, which have major manufacturing bases in Tamil Nadu and Noida, are among the top mobile phone exporters from India.

With a planned investment of Rs 20,000 crore for a greenfield airport in Parandur, Tamil Nadu, ICEA hopes that expanded infrastructure will facilitate smoother exports, with the new airport slated to handle up to 10 crore passengers annually and feature a cargo terminal to support increased shipments. As India looks to become a global hub for mobile phone exports, these infrastructure improvements are critical to sustaining growth in the coming decade.

(With PTI Inputs)