Experts See Little Impact on India’s Air Cargo from Pakistan Airspace Closure
In a move that has sparked concerns among global trade stakeholders, the Indian government is evaluating the impact of Pakistan’s recent airspace closure on air cargo shipments destined for the Gulf, Europe, and the United States. While the closure has raised eyebrows, exporters remain optimistic, asserting that the disruption to India’s trade will be minimal.
According to industry insiders, air cargo accounts for only 3-4% of India’s garment exports, with select shipments of gems, jewelry, electronics, and perishables also traveling by air. The vast majority of goods, they note, are transported via sea, rendering the airspace restrictions unlikely to cause significant upheaval. “The volume moved by air is simply not substantial enough to trigger major disruptions,” said a leading exporter based in Mumbai.
In a parallel development, India’s decision to ban the transshipment of cargo from Bangladesh is expected to stabilize domestic prices, offering some relief to local markets. However, trade analysts anticipate a surge in air shipments toward late May, as businesses rush to meet deadlines ahead of reciprocal tariffs set to take effect on July 9. The memory of April’s tariff announcement by former U.S. President Donald Trump looms large, when companies, including tech giant Apple, scrambled to ship goods—Apple alone dispatched five plane-loads of products—while garment and jewelry exporters airlifted substantial quantities to beat the deadline.
The air cargo market has since experienced some reprieve. Trump’s decision to pause reciprocal tariffs for 90 days, coupled with a sharp decline in shipments from China, has eased pressure on freight rates. According to the Drewry World Container Index (WCI), the composite index dropped 2% to $2,157 per 40-foot container for the week ending April 24, with rates from China seeing the steepest decline. Year-on-year, rates for New York-Rotterdam routes have surged 32%, while Rotterdam-Shanghai and Shanghai-Rotterdam routes fell by 36% and 24%, respectively.
Breaking down the numbers, freight rates from Shanghai to New York dipped 3% to $3,611 per 40-foot container, while Shanghai to Los Angeles and Rotterdam to Shanghai saw declines of 2%, settling at $2,617 and $481, respectively. Conversely, rates from New York to Rotterdam edged up 1% to $825, with Shanghai-Genoa and Los Angeles-Shanghai routes holding steady.
“Drewry anticipates further declines in freight rates in the coming weeks, driven by uncertainties surrounding reciprocal tariffs,” the maritime research firm noted in its latest report.
As global trade navigates these turbulent waters, India’s exporters remain cautiously optimistic. While the airspace closure and looming tariffs present challenges, the resilience of sea-based logistics and strategic policy measures are expected to keep India’s trade on course. For now, the nation’s exporters are keeping a close eye on the horizon, ready to adapt to whatever lies ahead.
