What Happened
- The suspension of commercial flights over Iran, Iraq, and parts of the Gulf region has caused significant disruption to India's air cargo exports, leaving consignments stranded at airport cargo terminals across the country.
- Airlines operating India–Gulf–Europe routes have been forced to reroute via longer corridors, with some suspending services entirely, reducing uplift capacity and creating a cargo backlog.
- The Air Cargo Agents Association of India (ACAAI) formally urged customs and aviation authorities to suspend demurrage charges on export cargo that cannot be flown out due to conflict-induced flight disruptions.
- Apparel exporters, pharmaceutical companies, perishables shippers, and MSME exporters are among the hardest-hit, facing penalties for holding cargo beyond allotted terminal time — charges that are accruing through no fault of the exporter.
- The Directorate General of Foreign Trade (DGFT) issued a trade notice on 2 March 2026 and constituted an Inter-Ministerial Group (IMG) for Supply Chain Resilience to coordinate government response.
- Industry bodies have requested multiple relief measures: demurrage waivers, "Back to Town" cargo return permissions, alternate port/airline switching, and working-capital support for cash-flow-stressed exporters.
What Happened (continued)
- The DGFT appointed Additional DGFT Abhinav Gupta as nodal officer for coordinating relief measures across ministries.
Static Topic Bridges
Air Cargo in India's Export Architecture
Air freight is the backbone of India's time-sensitive, high-value exports — pharmaceuticals, textiles, perishable foods, electronics, and e-commerce goods. India's major air cargo hubs include Indira Gandhi International Airport (Delhi), Chhatrapati Shivaji Maharaj International Airport (Mumbai), Bengaluru, and Chennai.
- India's air cargo volume has grown significantly — total throughput exceeded 3.5 million metric tonnes annually in recent years.
- The Gulf corridor is among the busiest for Indian air cargo: Emirates SkyCargo, IndiGo, Air Arabia, and others route large volumes through Dubai, Abu Dhabi, and Doha.
- Airspace closures over Iran and Iraq affect the shortest flight path between Indian subcontinent and Europe, as most India–Europe routes transited this corridor.
- Rerouting via alternate paths over Central Asia or the southern Indian Ocean adds 2–4 hours of flight time per sector, increasing fuel costs and reducing airline frequency.
Connection to this news: The Iran conflict has effectively disrupted the primary air corridor linking India's export hubs to Gulf and European markets, creating a choke in India's time-sensitive export supply chains.
Demurrage: What It Is and Why It Matters for Exporters
Demurrage is a charge levied on cargo that occupies terminal, port, or carrier space beyond the contractually agreed free period. In the context of airport cargo terminals, demurrage accrues when export consignments cannot be loaded onto aircraft within the allotted time window.
- Demurrage is charged by Cargo Terminal Operators (CTOs) — typically ₹500–₹5,000 per consignment per day depending on weight and terminal.
- Custom-cleared export cargo that cannot be lifted due to flight cancellations accumulates these charges passively, creating a financial burden on the shipper.
- The "Back to Town" procedure allows exporters to return stranded cargo to their warehouse pending re-booking, but typically requires customs re-clearance — a bureaucratic hurdle during crisis situations.
- DGFT and DGCA have the administrative authority to issue instructions to CTOs to waive demurrage during declared force majeure situations.
- Precedent: Similar waivers were issued during the COVID-19 pandemic disruptions to air cargo in 2020.
Connection to this news: Exporters are caught between accruing demurrage penalties for cargo that physically cannot be moved and the need to maintain contract commitments to overseas buyers — requiring emergency administrative relief from DGFT and DGCA.
DGFT and India's Export Support Institutional Architecture
The Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce and Industry, is the primary government authority managing India's trade policy and export promotion framework.
- DGFT administers the Foreign Trade Policy (FTP), which includes export incentive schemes like the Remission of Duties and Taxes on Exported Products (RoDTEP) and the Advance Authorisation Scheme.
- It works in coordination with ECGC (Export Credit Guarantee Corporation) for export credit insurance, and with APEDA/MPEDA for sector-specific export support.
- The Inter-Ministerial Group (IMG) mechanism is DGFT's coordination tool during export emergencies, bringing together Commerce, Finance, Civil Aviation, Shipping, and sectoral ministries.
- The FTP 2023 introduced provisions for supply chain resilience, including flexibility to change ports of export and carriers in exigent circumstances.
Connection to this news: The DGFT's rapid constitution of an IMG and appointment of a nodal officer represents the institutional response framework — its effectiveness will determine how quickly relief reaches the MSME exporters facing immediate financial distress.
Key Facts & Data
- ACAAI: Air Cargo Agents Association of India — key industry body seeking demurrage waivers
- DGFT Trade Notice: Issued 2 March 2026 on West Asia supply chain disruptions
- Nodal officer: Additional DGFT Abhinav Gupta for inter-ministerial coordination
- Demurrage: Charged by Cargo Terminal Operators when cargo cannot be lifted within allotted time
- Major India–Gulf–Europe air routes affected by Iran–Iraq airspace closures
- Cargo rerouting adds 2–4 hours per flight sector; reduces frequency and capacity
- Sectors hardest hit: Apparel, pharmaceuticals, perishables, FMCG, MSMEs
- Precedent for waiver: COVID-19 pandemic (2020) saw similar DGFT-DGCA demurrage waiver orders