Imports from East Asia will remain the larger share of this trade, especially driven by the need to support accelerating e-commerce demand in the region.
Expanding manufacturing will lift exports to East Asia, especially as prominent global brands expand production in India and some develop export-oriented products targeted at East Asian markets, the report noted.
East Asia is South Asia’s largest air cargo partner, and traffic between the two generated impressive growth prior to the pandemic.
East Asia is a major source of air imports for South Asian markets, including semiconductors used to feed growing electronics manufacturing in India and raw textiles to be sewn into garments in Bangladesh.
India is the largest air cargo market in South Asia and will be the primary driver of its continued growth, the report said.
Supply chain diversification throughout the Indo-Pacific will complement India’s manufacturing initiatives and accelerate demand for air cargo.
Nearly half of South Asian air exports to Europe are apparel and clothing, reflecting the region’s
well-established garment industry. Pharmaceuticals are also an important export, particularly from India.
South Asia’s rapidly growing population and rising household incomes will strengthen demand for imports of European products, while manufacturing will require European-sourced intermediate goods, the report said.
Economic reforms, competitive production costs, and the imperative to diversify supply chains are making South Asia an increasingly attractive place to do business and will propel air exports as well.
Air trade within East Asia and Oceania is closely tied to the East Asia-North America and
East Asia-Europe flows. However, geopolitical tensions, the COVID-19 pandemic and economic
uncertainty have hurt intra-regional traffic over the last decade. The market, though, is recovering this year and will return to fast-paced growth in the future, the Boeing report said.
Southeast Asia is poised to grow its market share as its economies mature, private consumption rises and industrial capabilities expand due to diversifying global supply chains.
As the digital economy in East Asia and Oceania grows, express and e-commerce networks will develop in conjunction. China, Japan, and South Korea represent the largest digital economies in the region, but Southeast Asia is poised to grow the fastest—over 15 per cent annually till 2030—with the Philippines, Vietnam, Thailand and Indonesia leading air cargo growth, the report added.
ALCHEMPro News Desk (DS)
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