DHL Express India kicks off indexed levy to offset rupee volatility | Company News

The company also plans to uphold its €1 billion investment in India, despite currency volatility — a matter of concern in economies such as South Korea and Japan, R S Subramanian, senior vice-president–South Asia, DHL Express, and managing director, DHL Express India, told Business Standard. Also, to partly offset the impact of currency volatility, DHL has introduced Currency Effects Index (CFX) from August 1. 

“Global numbers are excellent. Our performance in India is better than the global results. We are pulling the global performance because we are ahead of the benchmarks they are achieving,” he said. 

The rupee has been volatile for more than a year now, particularly after the ongoing West Asia crisis that started in late February. The Indian unit has depreciated 4.65 per cent since the start of the war in West Asia, while it fell 8.2 per cent against the dollar in the last one year. The currency has been stable in August so far. 

The weakening rupee is a risk to cover for DHL Express more than for businesses that operate on short-term contracts, Subramanian said. 

DHL typically assumes that the rupee will depreciate 2-3 per cent annually against the euro or dollar, and factors this into its pricing. However, depreciation beyond that level creates a gap. 

To partly address this, DHL has introduced a Currency Effects Index (CFX) on August 1. Similar to a fuel surcharge, the charge applies when the rupee depreciates beyond a specified threshold and automatically falls to zero when the rupee moves below the threshold. 

“As part of this ongoing review, we are implementing a Currency Effects Mechanism on Time Definite International (TDI) shipments in India, effective 1 August 2026. This is a formula-based adjustment to address significant increases in operating costs associated with currency volatility and foreign exchange fluctuations, in a structured and transparent manner for all our customers,’ according to Subramanian. 

DHL’s presence across 220 countries and multiple currency zones provides a natural hedge, though some currency movements have to be managed locally, he said. “Currency depreciation is a topic of discussion, but not in every country. At this time, it is a topic of discussion in India, an issue in Korea and possibly in Japan. For the rest, it is business as usual. In many places, trade is done in dollars, so contracts and price lists are in dollars, and there is no currency risk to cover,” Subramanian added. 

DHL Express India has traditionally aimed to grow at approximately 1.5 times the country’s GDP and strives to exceed this goal. Over a period of five to 10 years, the company’s compound annual growth rate (CAGR) in India has typically been 1-2 percentage points above this (GDP) benchmark, Subramanian added. 

In the quarter ended June 2026, DHL group’s revenue increased 13 per cent year-on-year (Y-o-Y) to 22.4 billion euros. Its operating profit rose 30 per cent Y-o-Y to 1.9 billion euros. 

India is being discussed in “very positive terms” globally, with engineering and manufacturing, automobiles, electric vehicles, new energy, and data centres among areas seeing investment, according to Subramanian. 

The company’s one billion euro investment programme in India, announced last year, remains on track despite global volatility and uncertainty. The programme covers all DHL businesses in India from 2025 to 2030. 

“The idea of stopping investments is off the table,” Subramanian said. Since the announcement, DHL has expanded its airside presence in Delhi, opened an expanded facility near Bengaluru airport and two service centres, with more in the pipeline. There are also longer-term plans in Bengaluru, Mumbai and Delhi, besides fleet expansion, including electric vehicles. 

Subramanian said the one billion euro was a “statement of intent” and that actual investments could be higher by 2030. DHL has also expanded its information technology (IT) development centres from one location in Chennai to five, adding centres in Mumbai, Bengaluru, Hyderabad and Indore. These centres handle software development and maintenance for DHL’s global systems across divisions. 

“There is no customer, local or global, with whom we interact that does not have a four- to eight-year expansion roadmap in India,” Subramanian said, adding that capacity was being created rapidly, particularly in engineering and manufacturing.

Data centres are also creating demand across their wider ecosystem, including power supply, power storage, battery energy storage systems, water and water treatment, he said. 

The introduction of Heavyweight Express has been DHL Express India’s most important move in 2026, Subramanian said. The service addresses situations where heavier shipments, which would not traditionally be considered Express shipments, require faster delivery because of supply-chain disruptions. 

“Globally, heavyweight is one of the big drivers of growth. In India, it has given a bump-up to our normal growth this year,” he said. The product has also helped DHL increase its share of wallet with existing customers and address new emergency requirements. 

The company is also focusing on network optimisation and technology-led automation to control costs. It is using robotic process automation and experimenting with artificial intelligence (AI) at customer touchpoints and in repetitive processes. 

Subramanian said logistics efficiency in India has improved, particularly in port handling and inter-city movement, but intra-city logistics remains an area for improvement. Customs and regulatory dwell times have also improved over the past decade, although complexity remains. 

On manufacturing, Subramanian said the long-term trend was towards manufacturing coming into India, with capacity from China also being expanded into the country. He said DHL was seeing investment in technology, pharmaceuticals and automobiles, particularly in sectors where the production-linked incentive (PLI) programme had worked. 

However, Subramanian added that India had not captured all the manufacturing that had moved out of China, with countries including Vietnam, Thailand, the Philippines, Malaysia and Singapore also benefiting.