End of JUL23, Boeing hosted a Symposium in New Delhi, which was attended by members of the Indian government, decision makers from airlines, freight carriers, forwarding agents, as well as leading representatives from Indian industries. At the event, in-depth information was delivered and personal contacts established.
Making Altasia* a reality
When the COVID 19 pandemic broke out, many European countries had neither available stocks nor production capacities for “Personal Protective Equipment”. Overnight, the term “supply chain” was on everyone’s lips. Propelled by mainstream media and dominating press conferences, it became a key term in politics. What applied to hygienic and medical products also affected many other goods such as semiconductors, components for instruments or industrial intermediate products. In many cases, demand still exceeds supply, today.
In addition, Russia's attac/h1>k on Ukraine on 24FEB22, followed by Western sanctions, further strained and distorted international supply chains. Again, an ongoing obstacle.
At the same time, the outbreak of war was a wake-up call for many international enterprises to rethink their investment policies due to rising risks. Especially since China, which to this day has not criticized Russia's invasion of Ukraine and cooperates closely with Moscow, is constantly increasing the pressure on Taiwan - also by playing military power games at sea. As a result, new international alliances are emerging. For example, closer cooperation among the BRIC countries, which includes India, and whose members are increasingly raising their voices on the world stage. Hence, many western companies have started to turn their back on China and look for alternative places in Asia to do business.
This turns the spotlight on India. Undoubtably, the world’s most populous country offers highly attractive conditions for foreign investors. Not only has the country become a benchmark in digitalization, but it is the world’s largest producer of vaccines and generic drugs, ranking third in global pharmaceutical production. Boosted by the above-mentioned parameters and having access to ambitious and well-educated young generations, India plans on becoming a USD 5 trillion economy by 2025.
India’s National Logistics Policy
In order to support India’s growths to become the world’s next production superpower, the government of India has drafted an integrated logistics action plan aimed at “build[ing] a modern, efficient and resilient logistics sector that seamlessly integrates multiple modes of transportation and leverages the best-in-class technology, processes, and skilled manpower, in order to significantly improve the country’s logistics performance and reduce logistics cost.”
These are ambitious, future-oriented goals.
In Germany, by contrast, we collectively live from the substance of (core) infrastructure, built decades ago. And, equally difficult, instead of having a binding federal infrastructure/logistics policy, we have “Master Plans”, “Agendas” or a “Federal Traffic Infrastructure Plan [Bundesverkehrswegeplan]”, none of which are binding when it comes to prioritization, funding, or legal proceedings. There is a lack of legislation providing the federal government with a clear directive power to fast-track legal proceedings to enable badly needed capacity enhancements or modernization for all modes of transportation and/or mobility. This includes aviation and airports, the maritime sector, the rail network, or projects imperative for the much-needed new traffic policy, going hand-in-hand with an energy system transformation.
Future-oriented aviation infrastructure development
Infrastructure cannot be built on demand. Sufficient and well-maintained capacity must be available to the market fostering investments and growth, otherwise a national economy will fall behind, losing market share and wealth to uprising nations such as India, for instance. India’s National Logistics Policy offers the opportunity to facilitate India’s ambitions macro-economic plans with an equally focused and swift development of purpose-built infrastructure. By doing it right the first time, India has already integrated vital success factors into future airport infrastructure such as:
- deploying energy efficiency design and zero carbon energy operating models to achieve the aviation industry’s net zero goal
- offering intramodality
- offering (and demanding) a greater level of data sharing, forecasting and contingency planning of all relevant third-party suppliers within an airport’s eco system
- integrating technologies such as biometrics, artificial intelligence, machine learning, and automation
- offering public transportation to the future workforce (in huge numbers), thus contributing to operational stability, raising workplace attractiveness, and reducing carbon emissions
Taking these criteria into account, it would be purposeful for India to develop one or better two airports as super hubs for cargo handling and throughput. This should go together with a network of intermodal gateways across the sub-continent, for feeding and de-feeding services. The combination of both measures would give a boost to the flow of goods by air and lead to robust supply chains. In view of the economic potential, the growing population, and the aircraft orders just confirmed by Air India and IndiGo, building a network of intercontinental and regional hubs would be a very smart move, it seems.
Europe falls behind
However, India’s rise depends on several domestic but also global developments, and cannot be taken for granted, so the journey is challenging.
This sharply contrasts the situation in Europe. There, entrepreneurial spirit seems to be a thing of the past, and the broad public including many decision makers are lulled by their comfort zone. When implementing major changes, patience is required because most decision-making processes are decentralized. There is also an increasing political tendency to take a variety of special interests into account, which slows down decisions and often leads to questionable compromises.
Where the old continent really stands economically is shown in the table published by PricewaterhouseCoopers, displaying the 100 most important groups by market capitalization. Of the first 15 names listed, 11 are headquartered in the USA. Ranked third is Saudi Aramco, Taiwan Semiconductor is listed tenth, and Tencent from China is in 14th position. The first European corporation named in the PwC list is Nestlé (ranked 17th), followed by luxury goods manufacturer, LVMH, from France (position 19). By the way, the first German corporation mentioned in the ranking is software developer, SAP (93rd place), preceded by Indian companies, Reliance Industries (ranked 40th) and Tata (position 66).
It was worth attending
Perceiving the attitude and impressive spirit of those engaged in Indian aviation and logistics matters, was extremely inspiring to me. The summit outlined a common vision and allowed a deeper understanding of a future trajectory, supporting India in becoming a leading nation in logistics and aviation. Besides a very compelling range of cargo aircraft presented by the U.S. plane maker, Boeing, thrilling panels delivered a wealth of technical and economic knowhow and expertise to the attendees. At the end of the two-day symposium, each participant headed home with a plethora of takeaways.
* Altasia is an acronym used by CNN, The Economist, and other media, and stands for Alternatives (to China) in Asia.
Eric Malitzke
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