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The silk route up in the air

January 6, 2011

Boosting India-China trade closer to the US$100 billion target by 2015, FedEx Express, a subsidiary of  American cargo company FedEx Corp announced it began operations of direct cargo flights with an Airbus 310 aircraft carrying 160 tonnes of cargo five times a week  between India and China. Buoyant on the increased trade between Asia’s two largest economies, FedEx Express will transport goods from New Delhi and Mumbai to Guangzhou in Southern China, the Chinese city which boasts of maximum trade ties with India.  FedEx has been operating direct New Delhi-to-Shanghai cargo flights since 2005.

The company’s new cargo flights “will help businesses offer superior value and service to their customers, enabling greater access to two of the most rapidly developing markets in the world,” David L. Cunningham Jr., Asia-Pacific president of FedEx’s express unit, said in a prepared statement.

As trade booms, the Rs 3,000-crore cargo market in India is witnessing intense competition with Blue Dart Express Ltd playing a dominant role with a 45 percent market share. The rest of the pie is shared by players like Gati Ltd, DHL Express and new entrants like Reliance, which acquired aviation entrepreneur Captain GR Gopinath’s logistics business, Deccan 360. FedEx has also decided to increase its stake in the Indian market by showing interest in further inorganic growth as has DHL which recently launched its State of the Art Free Trade warehousing Zone, in south India which allows traders to store and re-export cargo without having to pay import or export duties.

Trade analysts are hoping this boost in cargo and trade between the two countries will translate into more businessmen, professionals and tourists visiting each other’s countries. Currently commercial aircrafts plying between India and China are at a low as compared to two years ago, when Air India and China Eastern weren’t the only flights between the two nations. An increased traffic between India and China is expected to boost understanding, respect for one another and diffuse ignorance.

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