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India Freight Transport Report Q1 2011
Business Monitor International, Jan 2011, Pages: 43
India Freight Transport Report provides industry professionals and strategists, corporate analysts, freight transportation associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on India's freight transportation industry.
India grew strongly in 2010 and is expected to continue to do so in 2011 and through the forecast period. A major challenge will be the government’s adoption of public-private partnership (PPP) model for portdevelopment and its moving towards privatising the country's rail freight sector. So far, potential growthhas attracted private investment and problems about return or local political influence have beenovercome.
According to BMI's forecasts, real GDP growth in India in 2010 will be 7.9%, rising to 8.1% in 2011. From 2011 to 2015 we expect it to average 8.1%, outpacing even China, where we forecast growth toaverage 7.6%. A large middle class with high income and consumption is emerging in India.
India’s air freight recovered strongly in 2010, with 8.2% growth. The Port of Kandla saw only moderately strong growth of 4.7%.
Air India is troubled, with current debts of nearly US$4bn. With the sell-off of its air cargo planes, the company looks set to move away from running an air freight service. Logistical operators including DHLGlobal Forwarding, FedEx, TDG, M+R Spedag Group have been keen to expand their business in India.There are a number of potential new port developments that are looking for private investment for publicprivatepartnerships.
If the global recession has a second leg, this may affect emerging markets such as China as well, posing a risk to the expected growth in 2011. A PPP model may not be sufficient to counter the inadequacies in thecountry’s infrastructure rapidly enough, and could lead to increase bottlenecks at ports and in-landdistribution centres. Furthermore, there is little sign of the PPP model having been applied toinfrastructure projects such as roads. Labour unrest could also become more frequent and disruptive tobusiness in India if change does not occur rapidly or smoothly enough.
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