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Open Sky Policy: Absence of Kerala’s airports in the amendment may hit exports to Gulf market

Kerala
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While the amendment of the Open Sky Policy for foreign cargo carriers has led Air cargo agents and exporters to raise valid concerns over the move, it has also put Kerala’s fruits and vegetable exporters in jeopardy.

According to the exporters, none of the four airports in the State has been included in the operations of foreign, ad-hoc and pure non-scheduled freighter charter services and this would instead lead them to depend on neighbouring airports for fulfilling their export commitments.

The new policy is likely to affect exports from the State especially in the absence of domestic cargo and specialized cargo flights from the State. Kerala exports 150-200 tonnes of fruits and vegetables from the four airports in the State on a daily basis, the sources said.

Spike in Costs

Consequently, this would drive cost of exports from Kerala to increase, as the exporting community has to move their cargo to Bengaluru or Chennai, which will be time consuming and expensive, said Munshid Ali, Head of Export Grievance Cell of Calicut Chamber of Commerce and Industry.

Mr Ali also highlighted the point that the operations of pure non-scheduled freighter charter service flights are restricted to six airports — Bengaluru, Chennai, Delhi, Kolkatta, Hyderabad and Mumbai.

Thus, the agri products from Kerala are feared to lose their competitive advantage to the Philippines, Sri Lanka, Thailand commodities in the Gulf markets.

This would adversely impact farming communities as exporters have tied up with them for supply. The State government will also lose a portion of its revenue by way of GST on various services, he added.

The exporting fraternity here depends mainly on the Gulf markets with options of existing passenger flights with a cargo space for 15 tonnes; special cargo flights operated by Emirates to Dubai, Saudi Arabia, Oman with weekly two service; and ad-hoc operations after Covid by replacing the seats of the existing passenger flights.

Exploring Mode of Sea

In the absence of cargo flights, Subair Kolakkadan, the chamber president, said that a consortium of exporters association have been successful  in despatching five reefer containers by sea in association with Sharjah International Free Zone Authority, UAE and Oman Chamber of Commerce

The movement of exports from the State is facing hurdles after some foreign carrier airlines ceased operations. The dependence on passenger flights has already added to the cost of exports to West Asia by around INR 160-170 per kg against the normal rate of INR 60-70.

Various chambers of commerce in the State have taken up the matter with the Centre to include Kerala airports in the new policy.

However, the policy objective of the open sky policy as shared by sources is to encourage domestic cargo flights from India.

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