How Indian air cargo is strengthening safety and insurance framework

India’s aviation industry is undergoing a transformative phase, and while passenger safety often dominates headlines, the air cargo segment, a foundation of global trade, is equally in focus. India’s air cargo industry has undergone a remarkable transformation over the past decade. From the pandemic-induced lows of April 2020, when freight volumes across all airports collapsed to just 48,000 tonnes, the sector has rebounded with extraordinary resilience. Today, it stands as a critical pillar of India’s logistics ecosystem, driven by the surge in e-commerce, government-led infrastructure investments, and a boom in high-value manufacturing exports. Cargo throughput has grown from approximately 2.1 million tonnes in FY2014 to 3.26 million tonnes in 2024, and projections indicate an upward trajectory into 2025. A defining milestone came in March 2025, when aggregated monthly cargo volumes touched 342,000 tonnes, a staggering 610 percent increase from pandemic-era figures.

This resurgence is not merely a story of recovery; it reflects a structural shift in India’s aviation sector. Strategic initiatives such as dedicated freight corridors, partnerships between carriers, and modernisation of airport infrastructure are expected to propel India toward an ambitious target of 10 million tonnes per annum by 2030. However, this rapid growth brings unique challenges around operational safety, regulatory compliance, and financial risk mitigation. Addressing these challenges is essential to sustain momentum and position India as a global logistics hub.

Strengthening regulatory foundations
Safety in air cargo operations begins with robust regulations. Recognising the evolving risk landscape, India introduced the Aircraft (Carriage of Dangerous Goods) Rules, 2025, effective June 19, 2025. These rules align with the latest IATA and ICAO standards and represent a significant leap forward in operational safety. Key enhancements include mandatory Digital Dangerous Goods Declarations (DGDs) for improved traceability, certification of handlers by the DGCA for hazardous cargo, and stricter packaging and labelling protocols for high-risk items such as lithium batteries, chemicals, and infectious substances. These measures not only reduce the likelihood of accidents but also enhance compliance transparency across the supply chain.

Complementing these rules is the DGCA’s special audit framework, which now extends to cargo operations across airlines, maintenance repair organisations (MROs), airports, and ground handlers. These audits assess Safety Management Systems (SMS), adherence to ICAO Annex 18 and IATA Dangerous Goods Regulations, and cargo compartment integrity. Non-compliance can result in penalties or even license suspension, reinforcing accountability and elevating safety standards to global benchmarks.

Technology as a risk mitigator
The Bureau of Civil Aviation Security (BCAS) is spearheading a technology-driven transformation to secure cargo operations. AI-enabled screening systems are being deployed to detect anomalies faster and reduce human error. Blockchain-based cargo tracking ensures end-to-end visibility and tamper-proof documentation, while the adoption of electronic airway bills (e-AWB) minimises manual errors and fraud risks. These innovations collectively enhance operational efficiency, reduce vulnerabilities, and build trust among stakeholders.

Infrastructure modernization
The Union Budget 2025 has earmarked significant investments for upgrading cargo terminals, cold-chain facilities, and screening systems at major hubs such as Mumbai, Delhi, and Bengaluru. These upgrades are critical for handling sensitive shipments like pharmaceuticals and perishables, which require specialised storage and temperature-controlled environments. By modernising infrastructure, India is not only improving safety but also positioning itself as a competitive player in global logistics.

The financial safety net
Operational safety is only one side of the resilience equation; financial protection is equally vital. India’s air freight market, valued at $13.08 billion in 2023, is projected to grow at a CAGR of 5.65 percent, reaching $17.22 billion by 2028. Globally, the air cargo insurance market is expected to expand at approximately 6.5 percent CAGR over the next decade. Aligning with these trends, India is integrating air cargo insurance into its broader risk management framework, particularly for high-value shipments such as electronics, pharmaceuticals, and perishables.

The insurance ecosystem is evolving to meet these demands. Exporters and cargo handlers are encouraged to accurately declare shipment values, adopt risk mitigation strategies, and leverage digital documentation for smoother settlements. These practices not only reduce financial exposure but also enhance confidence among global trading partners.

Persistent challenges and emerging opportunities
Despite these advancements, the sector faces structural challenges that could impede growth if left unaddressed. High logistics and handling costs keep India’s supply chain expenses above global benchmarks, while limited domestic MRO capacity forces reliance on imported maintenance for engines and specialised parts, increasing downtime and costs. Ageing fleets compound these issues. Cargo aircraft average 25.6 years globally, and India mirrors this trend, impacting safety, fuel efficiency, and insurance premiums. Over-reliance on belly-hold cargo, which accounts for nearly 70 percent of shipments, restricts scalability and reliability. Additionally, the complexity of claims, driven by fraud, shipment misrouting, and international legal disputes, slows resolution and inflates costs.

Yet, opportunities abound. DGCA’s digitised declarations and BCAS’s AI-blockchain initiatives are reducing compliance risks and fraud. Plans for 80 new freighters by 2045 signal a decisive shift toward fleet renewal. Streamlining customs through platforms like e-Sanchit, training 50,000 MRO professionals, and incentivising dedicated cargo hulls could lower logistics costs to 8 percent of GDP by 2030. These measures, combined with regulatory rigor and financial safeguards, can unlock India’s full potential as a global logistics powerhouse.

A Blueprint for resilience
India’s aviation sector is rising above risk by weaving together regulatory strength, technological innovation, and financial resilience. From digitised dangerous goods declarations to AI-driven security and robust insurance frameworks, these initiatives collectively reduce operational vulnerabilities, secure trade continuity, and protect stakeholders from financial shocks. The vision of achieving 10 million tonnes per annum by 2030 is not aspirational; it is attainable, provided safety and insurance remain at the heart of this transformation. In an era where global supply chains hinge on reliability, India’s commitment to building a safer, smarter, and financially secure air cargo ecosystem positions it firmly on the runway to global leadership.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of Indian Transport & Logistics News.