Bangladesh's RMG exports via Delhi airport upset Indian apparel makers

Garments from Bangladesh have been a key driver behind the surge in export cargo trans-shipment at the Delhi International Airport Limited (DIAL) in the last one year but the development has upset Indian apparel suppliers.

On February 7 last year, India allowed DIAL to serve as a cargo trans-shipment hub between Bangladesh and other global destinations.

On the back of the shipment from Bangladesh, Delhi airport's cargo export rose to 5.17 million tonnes between April last year and January this year.

However, the increase in RMG from Bangladesh for exports via Delhi airport has caused consternation in India's Apparel Exporters' Promotion Council (AEPC). Bangladesh is a big competitor of India in the textile sector.

In a letter to the Indian government last month, the AEPC demanded the withdrawal of the February 7 order. The council also sent its communication to the Central Board of Excise and Customs.

AEPC Chairman Sudhir Sekhri said 20-30 loaded trucks arrive in Delhi every day which slows down smooth movement of cargo and airlines are taking "undue" advantage of this.

"This has led to an excessive increase in air freight rates, delay in handling and processing of export cargo, and severe congestion at the cargo terminal at Delhi airport."

This is rendering the exports of Indian apparel goods through the Delhi air cargo complex uncompetitive, Sekhri added.

The council said the Red Sea crisis has already increased transportation costs of domestic exporters and it has led to a shift of export shipments from sea to air mode.

Allowing Bangladeshi export cargo via Delhi airport will further intensify the logistical challenges and increase the transportation cost for local apparel exporters, the letter said.

Earlier, the trans-shipment of Bangladesh export cargo was allowed only through the Kolkata air cargo complex.

DIAL is a joint venture, with GMR Airports Ltd owning 64 percent of the share. The Airports Authority of India owns 26 percent and the rest 10 percent belongs to Fraport AG Frankfurt Airport Services Worldwide.

Sanjiv Edward, CEO for cargo at GMR Airports, however, termed as "a significant milestone" the trans-shipment of more than 8,000 tonnes of Bangladeshi cargo from Delhi airport to European destinations since February last year.

"Delhi airport is playing a pivotal role in enhancing bilateral ties between India and Bangladesh, particularly in facilitating the seamless export of Bangladeshi cargo to global markets, cementing the airport's status as the foremost cargo hub in Southeast Asia."

The airport has helped trans-ship readymade garments to European destinations, including Spain, the Netherlands and France. The European Union is the second-largest export destination for Bangladeshi apparel.

The trans-shipment facility has not only reduced shipment costs for manufacturers but also led to a daily increase in the overall export of international cargo via the airport, covering a spectrum of products, including RMG, handlooms, footwear, leather products, jute products, and pharmaceuticals.

The success of trans-shipment has also triggered positive developments in the aviation sector as Bangladesh's cargo using the hub has motivated airlines to enhance their capacity at the airport, providing Indian exporters with more options in terms of capacity, destinations and economically beneficial choices.

Five extra X-ray machines have been installed for handling cargo from Bangladesh to avoid any congestion for general cargo.