Red Sea tensions more than double cost of exports to Indian economy

Indian export department official says export costs have more than doubled; because of inner tension Red Sea. The government estimates that about 80% of merchandise trade between India and Europe (estimated at about $14 billion per month) typically passes through the Red Sea.

Tensions in the Red Sea began last November when it was threatened Houthis Yemeni ships block the passage of Israeli ships or ships carrying Israeli cargo mandemen And the Red Sea, that's victoryGaza Strip It has suffered from Israeli aggression for more than 100 years, resulting in the death of more than 24,000 Palestinians and the injury of more than 60,000 people, most of whom were children and women.

Tensions increased when the United States and Britain launched missile attacks on Houthi rebel sites in Yemen, which they described as a response to a threat to navigation in the Red Sea.Last month, the United States announced an alliance guardian of prosperity To curb Houthi armed attacks, 10 countries are involved.

Exporters say 95% of ships change course and turn to roads cape of good hope Since the Houthis began attacking ships in November 2023, South Africa has increased the sailing distance from India from 4,000 nautical miles to 6,000 nautical miles and the duration from 14 days to 20 days.

Compare and decide ocean freight Major companies such as Maersk, MSC and Hapag-Lloyd have halted or suspended their operations in the Red Sea.

Four Indian exporters, including the head of one of the exporters' unions, reported that the cost of shipping a 24-foot container from India to places such as Europe, the United States and the United Kingdom has risen to $1,500 from $600 before tensions erupted. Red Sea.

Profits evaporate

“Our profit margins have been wiped out due to rising transportation costs,” said Arun Kumar Garodia, chairman of the Engineering Export Promotion Council of India, noting that most buyers are not ready to scrutinize prices.

India's exports worth at least $10 billion will be hurt in the fiscal year ending in March 2024 due to high transportation costs and delays in order delivery, he added.

He said shipping lines were threatening to raise shipping costs further later this week.

Exporters also said that about a quarter of exports this month have been halted due to shipping delays.

Satya Srinivas, a senior official at the Indian Ministry of Commerce, said yesterday: “The navigation of most ships has been affected, with delays of two to three weeks generally due to delays in ships with longer routes. “

He added that while exports worth an estimated $38.45 billion in December were not affected by the Red Sea crisis, some shipments have been suspended recently.