Indian air cargo is expected to soar in the next three or four years with the Indian economy on a solid growth trajectory and the liberalisation of the aviation sector in the works.

But, said a market research report from Frost & Sullivan, much work needs to be done on infrastructure.

According to the Shipping Gazette, there is now rising optimism that India will emerge as a cargo hub, due to its geographic location between south east Asia and the European Union, according to new analysis from California market research firm.

The report concluded that the Indian air cargo market is expected to grow at a compound annual rate of about 8.3 per cent by 2013, up from total air cargo (domestic and international) of about 1.77 million tonnes in 2007-08.

"Increasing globalisation, integration of the world economy, and the strengthening of India in the IT service provider space has resulted in a booming Indian economy, supporting a thriving global economy," said the authors, analysts Arun Narayanan and Chethan Kambi. "This has increased the aggregate demand and is an important driver for air cargo services."

The market is anticipated to receive a further boost with the recent raising of FDI limits permitting up to a 74 per cent stake in Indian cargo airlines. Proactive and favourable government policies will greatly encourage investments in the air cargo industry and facilitate the setting up of the required amenities and infrastructure. It will also help establish multi modal cargo hubs for quick and efficient transportation of cargo.