India is a huge country and distances between major metropolitan areas can be enormous. Foreign investors need to take the logistical situation of their choice of location into account including the cost of inland transportation to major domestic markets from the planned company location.
Distance examples :
From Delhi to :
Distance / Km
From Mumbai to :
From Bangalore to :
Distance / Km
Distance / Km
No. of international airports : 20
The top 10 represent almost 100% of the passenger and cargo volume :
Source : Aviation Authority of India
% share int'l pass.
% share dom. pass.
% share int'l cargo
% share dom. cargo
Until this moment Mumbai remains the main gateway to India for foreign visitors as well as cargo and also takes the number 1 slot when it comes to domestic passengers and goods. This is true both for the air transportation network as well as sea cargo. Mumbai has 3 major deepsea ports : Nhava Sheva, Bombay Port and Jawaharlal Nehru Port.Deepsea ports :
Panaji & Marmagoa
Chennai & Tuticorin
These ports offer in theory all the necessary import and export facilities but in general can differ greatly from each other in sofistication. In general the best rated ports are Nhava Sheva in Mumbai and Ennore in Chennai.
To reach the hinterland the most useful means are by rail and road. The Indian railnetwork is extensive and ports such as Nhava Sheva and Ennore offer the possibility to maintain the cargo under bond until it has reached it's final destination in India.
Because a part of the inland haulage cost is taken as a % of the cleared value it can be wise not to clear in the port of arrival but only in the location of destination. Mumbai, Chennai and Kolkata offer the most extensive inland railnetwork connections.
India's national highway system in still under development. Some stretches as between Mumbai and Pune or Delhi and Agra are excellent but in many cases a national highway consists of a 2-lane road that carries traffic from passenger cars to heavy lorries to bullock carts to people on foot.
India's main rivers are :
North West coast
Narmada & Tapi
Godavari, Krishna & Mahanadi
North East coast
Ganges & Brahmaputra
These riversystems have the potential to connect the coast with thousands of kilometers of hinterland. Unfortunately India has only a few waterway systems. The 2 most developed are in the north east.
National waterway no. 1 connects the port of Haldia (Kolkata) with the Ganges rivernetwork that reaches deep into the Indian continent, all the way through Uttar Pradesh and into Uttaranchal, passing Delhi at less than 100km distance. In total 10 IWT terminals can be found from Haldia until Varanasi in Uttar Pradesh, still over 750km from Delhi.
National waterway no. 2 covers the Brahmaputra riversystem in the far North East. The Brahmaputra river enters India via Bangladesh and has 12 IWT terminals until Arunachal Pradesh.
The 3rd most important watersystem network is found on India's south-west coast, in Kerala between Kochi and Ashtamudi Kayal.
Kolkata has long been avoided by (intenational) investors as a location of establishment due to the communist government of West Bengal that has governed the state for decades. In the recent past the state government of West Bengal has begun to promote the state more actively. It's potentially excellent logistical infrastructure of deepsea port, international airport, railway network and waterway networks could make it a new transportation hub in India.Air
The fastest and for the central government cheapest way to improve the domestic logistical situation is via expanding and upgrading India's national airway network.
Allowing private operators to establish new domestic airlines as well as privatizing international and domestic airports will gain the government revenue and releave it of the burden of development.
Three major airlines have long had the Indian market for themselves : Air India and Indian Airlines (both government owned) plus Jet Airways (privately owned). This ensured good incomes due to very high ticket prices for domestic flights (e.g. € 400,- Delhi Bangalore return).
Newcomers e.g. Deccan Air, Air Sahara, Go Air now offer low cost no frills flights. They are targeting India's huge domestic train clientele. Fares can go for as low as Rp. 1,- (€ 0.02) to more average prices of € 10,- for one way fares between the major metropolitan area's. Currently only 4.0 million Indians use flying as a means of domestic transport with annual sales of around 26 million seats.
Main bottleneck is the state of the Indian airports. These are not equiped to handle greatly increased traffic. Increasing landing and parking slots is almost impossible within the current infrastructure. Only 5 cities account for over 67% of all airtraffic. The central government is now forcing airlines (both new and established) to make use of little used airports around the country as their regional hubs. This ensures that the opportunity of flying is reaching a wider national audience, simply because the concentration of flying possibilities now resting with the top 5 airports will be spread around the country.
The central government is also establishing a program of privatizing airports. Indira Ghandi International in Delhi and NT Rama Rao International in Hyderabad are the 1st two. More are certainly to follow with the main prize being Chhatrapati Shivaji International in Mumbai.