Development of Hyderabad as logistic hub for air cargo can make exports and imports cheaper by saving $100,000 on each international freighter routing through different destinations in India, said a top official of Hyderabad airport.
With its central location and the world-class facilities, the Rajiv Gandhi International Airport here is ideally suited to be the cargo hub of the country, he said.
However, this requires improving the infrastructure and streamlining the process like 24X7 custom clearance and reducing the import dwell time, said D.P. Hemanth, chief operating officer, hub development, cargo, free trade zone, GMR Hyderabad International Airport Limited (GHIAL), which operates the Hyderabad airport.
A Boeing 747 or Airbus A380 coming to Delhi, flying two hours to Mumbai, another two hours to Bangalore and then flying back to Frankfurt, is spending an additional $80,000 to $100,000, he said.
"This is what happening now because you don't have a logistic hub. If your bring these wide-bodied aircrafts to a central point of the country and connect to rest of the country through road, rail as well as domestic freighter services, this money can be saved making exports and imports cheap," he said.
Addressing a conference on exports organized by the Confederation of Indian Industry (CII), he said the import dwell time in India is anywhere between five to six days where it is just half an hour in Dubai and Singapore.
In terms of volumes, 10 percent of the country's exports are carried by air but in terms of value, it is 40 percent or Rs.320 billion because air cargo is preferred mode of transport for high value and perishable goods.
Hemanth pointed out that the logistic cost in India is 12 to 14 percent of GDP where as it is only four to five percent in the developed countries.
"By speeding the exports and by reducing the inventory carry cost, the country can save 10 percent of GDP and saving of interest costs on the cargo alone will triple the turnover of exporters," he said.
With the officials of Agriculture Products Export Development Authority (APEDA) pointing out that a bulk of agri products from Andhra Pradesh were going through Mumbai Airport, Hemant said the airport would tap agri exports by replicating the Pharma terminal.
The airport has India's only dedicated pharmaceutical handling zone, the design of which has been borrowed by Lufthansa to develop a similar facility in Frankfurt.
Hemanth said the other advantages of developing Hyderabad as a cargo hub is GHIAL's plans to develop a city around the airport with healthcare, leisure, education, hotels, a logistic park, free trade zone and other facilities.
He said the free trade zone had already become operational. It is an area where one can export or import without having to pay duty as it does not come under domestic tariff area.
The official said the airport developed under private public partnership mode and commissioned in 2008 was witnessing robust growth at 13 percent CAGR with export alone growing at 45 percent.
"This is the only airport in last two years which despite recession has grown. All airports around the world showed minus 10 percent growth but last year we grew by 10 percent," he added.
Rajiv Gandhi International Airport has so far generated 10,000 jobs and attracted investment of $1.7 billion.