Air cargo volumes being flown from India to the US have plummeted in recent weeks as a result of Washington’s decision to implement tariffs of up to 50%.
The latest weekly figures from data provider WorldACD show that air cargo volumes from India to the US dropped by 12% week on week in the week ending August 31 (week 35) and by a further 14% in week 36.
WorldACD said the slump in demand followed a surge in volumes in mid-August as companies rushed to move goods ahead of the latest tariff increase on India.
Demand in week 34, for example, increased by 28% compared with the preceding week. The trade had also seen volumes increase earlier in the year as companies were moving away from China in response to US tariffs on Beijing.
“India to US air cargo tonnages have generally been up year on year in recent months, in part due to pressure on US importers to seek alternatives to Chinese suppliers,” WorldACD said. ”But India to US tonnages dipped slightly in the first half of last month after Washington imposed 25% ‘reciprocal’ tariffs on imports from India from 7 August.
”And after US president [Donald] Trump in early August announced an increase in those India import tariffs from 25% to 50% from 27 August, to penalise India for buying Russian oil, India-US air cargo tonnages surged as shippers tried to rush cargo through ahead of the deadline.”
Volumes then “slumped” after the higher tariffs took effect, WorldACD explained.
Mirroring demand, WorldACD said that Spot rates from India to the US have also dropped below $4 for the first time in several months, to $3.99 per kg in week 36, around 22% below their elevated levels this time last year.
Changing lanes
While demand from India to the US has come under pressure in recent weeks, demand to Europe has been on the up.
WorldACD figures show that volumes that in week 36, demand from India to Europe increased by 8% compared with last year.
Demand from Sri Lanka to the US has also increased as demand from India has sunk.
”Volumes from Sri Lanka to the US have also increased significantly since the start of August, standing +13% higher in week 36 than in the equivalent week last year,” the data provider said.
India is not the only country to be affected by US tariff policy. Last week, WorldACD reported in its monthly market round-up that China’s airfreight market is shifting away from the US in favour of Europe.
In August, cargo volumes from China and Hong Kong to the US were down 5% year on year.
In contrast, volumes from China and Hong Kong to Europe increased by 11% on last year’s levels during the month.https://www.aircargonews.net/data-news/us-tariffs-on-india-take-their-toll-on-air-cargo-demand/1080637.article