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Expert Views | New Civil Aviation Policy To Boost Air Cargo Business

ACLPB will recommend norms for space allocation for air-cargo, including express cargo for all greenfield airports

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India has made it easier for the country's airlines to fly abroad as part of the first set of comprehensive rules governing civil aviation which are designed to boost air travel and economic growth.

Prime Minister Narendra Modi's government presented the national civil aviation policy, which has been years in the making, as a bid to make flying more affordable for India's expanding middle class, to bolster competition and to get more of the country connected.

Under the policy, domestic carriers will no longer have to operate for five years before they can start flying abroad, although they must still have 20 aircraft in their fleets.

Announcing the policy, which has been in the works for nearly two years, Civil Aviation Minister Ashok Gajapathi Raju said India’s aviation sector is poised to become the world’s third largest by 2022.

Vijay Kumar, Chief Operating Officer, Express Industry Council of India, said, "Express Industry Council of India (EICI) lauds the efforts of the Ministry of Civil Aviation on the civil aviation policy and congratulates the government for ushering in reforms for the Indian aviation industry. In accordance with EICIs long term advocacy on behalf of the express industry, the Policy takes cognizance of the distinctiveness of the Express Delivery Services and the potential it offers. The policy recognises Express Delivery Services as a separate segment within air cargo owing to its distinctive nature and processes.

The Express Industry is turning out to be a pivotal segment for enhancing the exports, especially in the SME segment, in view of expansion of e-commerce and other new age industries. With the emphasis of the government on “Make In India”, ‘Ease of doing business’ and enhancement of exports, it is all the more important that EDS is recognised and facilitated with adequate infrastructure at the airports with rational lease tenures and rentals to provide efficient services in India".

The following framework is expected to ensure growth of air cargo business:

a) Cargo facilities co-located at an airport are covered under the ‘Harmonised List of Infrastructure and will get the benefit of ‘infrastructure’ sector.

b) The Air Cargo Logistics Promotion Board (ACLPB) has been constituted to promote growth in air cargo by way of cost reduction, efficiency improvement and better inter-ministerial coordination. The Board and the industry will submit a detailed action plan after stakeholder consultation, with the objective of reducing dwell time of air cargo from ‘aircraft to truck’ to below 48 hours by 31 December 2016 and to24 hours by 31 December 2017 by reduction in free time and other measures. For exports, Dwell Time will be reduced to 12 hours by 31st December, 2016 and 8 hours by 31st December.

d) ACLPB will develop non-legal and indicative Service Delivery Modules after extensive consultations with stakeholders for all elements of the air cargo express cargo value chain such as – airlines, airports, terminal operators, Customs House Agents (CHA), freight forwarders, and government agencies like Customs, CISF, quarantine officers etc. An Air Cargo Community System will also be developed to avoid delays.

h) The space allocated for cargo on the air-side and city side at most Indian airports is inadequate. ACLPB will recommend norms for space allocation for air-cargo, including express cargo for all greenfield airports. The action plan for space-augmentation at existing airports will be developed by ACLPB on a case by case basis in consultation with stakeholders.

i) The government will endeavour that all relevant central government authorities are available through a single window at the cargo terminals. These include Customs, wild life clearance, Drug Controller, Plant and Animal Quarantine, FSSAI, Archaeological Survey of India, DGCI etc. Clearances will be given promptly and online after necessary checks through a Single Window System.

j) The government has commenced 24x7 Customs operations at several airports. However, it has not been utilised optimally by industry. ACLPB will work closely with industry and propose action steps to spread out cargo handling round the clock including provision of adequate manpower. The suggestions /recommendations of ACLPB will be placed before the Central CCFC for appropriate action.

k) ACLPB will promote global good practices like Free-Trade Warehousing Zones (FTWZ), Air Freight Stations, Bonded trucking, dedicated cargo airports etc.

m) ACLPB will work with AERA and Airport operators and recommend user charges which are competitive vis-a-vis competing aviation hubs. In particular for the non-metro airports, the lease and other fixed charges levied by AAI on cargo facility will be kept low so that it does not become an entry barrier.

n) Airport operators will be encouraged to provide space for at least 10 years lease to operators of express cargo freighters who may then develop dedicated infrastructure to improve their operational efficiency.