As of now, there has been no significant impact on India's exports and imports owing to the crisis in the Red Sea, as per an official statement. Although shipping costs have risen due to ships taking longer alternate routes.
"The volume of trade remains unaffected so far. Only transportation expenses have increased, impacting all nations reliant on the route. We must assess long-term demand, which depends on exports to the EU and US,” the official commented.
These two regions account for over 30% of India's exports.
However, exporters have expressed concerns that the sharp rise in freight costs may eventually impact India's exports. Supply chains throughout the world have been thrown off balance by the Houthi rebels' attacks on commercial ships in the Red Sea, the busiest maritime route in the world. The rebels are located in Yemen. Due to forced rerouting, ships have had to travel lengthier routes, which has raised freight charges, necessitated war insurance premiums, and majorly delayed shipments.
Read More: https://www.emeriobanque.com/blogs/india%27s-trade-dynamics-amidst-the-red-sea-crisis
