FedEx is investing $150 million to develop an integrated air cargo hub at Delhi’s Indira Gandhi International Airport, with completion expected within 12 to 18 months.

The proposed 230,000-square-foot facility, located within the airport’s 50-acre GMR Cargo City complex, will bring the company’s international gateway and pickup-and-delivery operations under one roof. Once operational, it is expected to increase FedEx’s processing capacity in Delhi from 600 packages per hour to 5,000 on average, with scope to scale up further.

The logistics giant plans to introduce extensive automation at the facility, including automated sortation systems and high-speed X-ray screening equipment, in an effort to enable shipments to be processed more efficiently while increasing throughput.

The groundbreaking ceremony for the facility was held in the national capital on Tuesday attended by India’s civil aviation minister Kinjarapu Rammohan Naidu.

Delhi Airport is India’s leading air cargo hub, moving 1 million metric tons of freight per year, according to Naidu.

“India is a critical market in our global network, with north and east India playing an important role in the country’s growing trade and economic opportunity,” said Kami Viswanathan, president of FedEx Middle East, Indian Subcontinent and Africa (MEISA) in a statement. “Strengthening our presence in Delhi will enhance connectivity across these markets and support businesses as they grow and expand. It reflects our long-term confidence in India and our commitment to investing in the capacity and capabilities needed to support the country’s evolving trade needs.”

The Delhi hub is one three air gateways FedEx operates in the country. Delhi supports the northern and eastern parts of India, complementing a hub in Bengaluru in the south and Mumbai on the west coast.

In February, the logistics provider announced a long-term investment of $250 million in a new cargo hub at Navi Mumbai International Airport, bringing the combined commitment in the new Indian hubs to $400 million. That month, FedEx and the airport broke ground on the fully automated 300,000-square-foot facility.

The regional consolidation and distribution hub is planned to commence with an initial handling capacity of approximately 500,000 metric tons annually, scaling in phases to around 2.6 million metric tons in its final development stage.

With its proximity to Nhava Sheva Port, as well as industrial corridors and multimodal transport networks, the Mumbai hub is positioned to support India’s high-growth export sectors, according to the airport.

According to a report from daily Indian business publication Mint, FedEx’s revenue in India increased 40 percent in the past year.

The launch comes as India has sought to bolster its air cargo handling capabilities. The country aims to more than double its air cargo handling capacity to 10 million metric tons by 2030 from about 3.96 million metric tons in 2025, according to Naidu. Last year, total metric tons moved increased more than 6.5 percent from the year prior.

“FedEx is going to contribute a lot into to that growth story,” Naidu said during the event. “The vision is very clear for us when it comes to air cargo. We need to increase the volumes, we need to reduce the time and we need to reduce the cost.”

Naidu pointed out that while India has successfully improved passenger-related infrastructure across the south Asian nation’s airports, “we’ve been missing out on quite the potential of air cargo.”

The aviation minister highlighted the recent opening of Noida International Airport roughly 50 miles south of Delhi, which officially launched cargo operations in June. The airport is expected to handle 1.2 million metric tons of freight annually.

India relaxes screening process for transshipment cargo

Aside from building new hubs, India’s government has sought to bolster the country’s air cargo capabilities by removing the mandatory rescreening of transshipment cargo at transit stations to alleviate supply chain bottlenecks.

On Friday, Air India unveiled the results of a “proof of concept” to test the new policy, noting that it reduced the average cargo connection time at Delhi Airport from 36 to 48 hours to five to eight hours.

The airline operated on the international-to-domestic Chennai-Delhi-Frankfurt route. Over the course of two months, average cargo volumes doubled from 2.2 metric tons per day to 4.5 metric tons per day.

Traditionally, a cargo consignment from Chennai to Frankfurt would need to be unpacked at Delhi Airport, with each individual package undergoing the security re-screening before being loaded onto an onward flight to Frankfurt. Under the new policy, eligible cargo can remain securely packed within the same unit load device throughout its journey, subject to prescribed security controls.

“This reformed cargo transshipment policy has the potential to be a game-changer for India’s air cargo sector,” Ramesh Mamidala, head of cargo at Air India in a statement. “By enabling seamless cargo transfers through Delhi, it can help attract transit traffic that currently moves through foreign gateways, unlock additional cargo volumes for Air India, and significantly improve aircraft belly utilization across our expanding network. Delhi alone has the potential to attract more than 2 million metric tons of additional annual transshipment cargo across 95+ addressable international air cargo corridors.”

The initiative has since been expanded to shipments from Delhi to Copenhagen and London Heathrow, while five additional domestic destinations have been brought into the proof of concept.

At the FedEx ceremony, Naidu added that the aviation ministry is considering a new policy that could enable end-to-end cargo processing at off-airport facilities. This move would decongest cargo terminals and free up airport space for other aviation developments.