Indian exporters fear freight surge as US Israel strike on Iran disrupts Red Sea routes – BusinessToday

Indian exporters on Saturday flagged issues over rising logistics and insurance coverage prices after a joint navy strike by the USA and Israel on Iran triggered a pointy escalation within the Center East, threatening key commerce routes to the US and Europe. 

Trade representatives warned that extended tensions may disrupt established delivery lanes, inflate freight charges and push up enter prices, particularly if international crude costs surge. 

Following the assault, Iran launched retaliatory strikes focusing on a number of American navy bases throughout the area, together with in Qatar, Kuwait and the United Arab Emirates, elevating fears of a wider battle that would destabilise essential maritime corridors. 

Federation of Indian Export Organisations (FIEO) President SC Ralhan mentioned the unfolding battle has already begun to pressure international logistics networks. “Air routes are being altered, and maritime commerce by means of the Red Sea and key Gulf straits faces heightened uncertainty. If diversions turn out to be extended, shipments could more and more should reroute by way of the Cape of Good Hope, including an estimated 15–20 days to transit time for Europe and the USA,” he mentioned. 

Ralhan added that heightened geopolitical threat sometimes results in a spike in marine insurance coverage premiums, additional growing transaction prices for exporters. “A chronic disruption may additionally exert upward stress on international vitality costs, with consequential implications for enter prices and forex stability, together with stress on the Rupee,” he famous. 

Attire Export Promotion Council Chairman A Sakthivel echoed comparable issues, saying exporters are fearful about delays in shipments to Europe, the US and different Western markets if vessels are pressured to take longer routes. 

India, in the meantime, urged all sides to train restraint and keep away from additional escalation, emphasising that the sovereignty and territorial integrity of all nations should be revered. 

Exporters recalled that tensions within the Center East following the Israel-Hamas struggle in 2024 had already disrupted shipments by way of the Red Sea route, forcing carriers to go for longer voyages. The disaster had intensified on October 19, 2023, when Iran-backed Houthi rebels in Yemen started attacking civilian cargo vessels close to the Yemeni coast. 

A leather-based exporter mentioned the sector may face comparable challenges if the present battle drags on, warning that sustained instability within the Red Sea and Gulf area would require shut monitoring and coverage help to assist exporters stay aggressive. 

(With inputs from PTI)