Indian export sector officials said the cost of exports has more than doubled; Because of the tension in the Red Sea. Government estimates indicate that about 80% of India’s merchandise trade with Europe, estimated at about $14 billion per month, usually passes through the Red Sea.
Tension in the Red Sea began last November, when the Yemeni Houthi group threatened Israeli ships or those carrying Israeli goods by preventing them from passing through Bab al-Mandab and the Red Sea, in support of the Gaza Strip, which has been subjected to continuous Israeli aggression for more than 100 years, and led to the martyrdom. More than 24 thousand Palestinians were killed, and more than 60 thousand others were injured, most of them children and women.
Tension increased when the United States and Britain directed missile attacks on Houthi sites in Yemen, in what they called a response to threats to navigation in the Red Sea. Last month, the United States announced the establishment of the Guardian of Prosperity coalition to curb Houthi attacks, with the participation of 10 countries.
Exporters said that 95% of ships changed their course to the Cape of Good Hope route in southern Africa, increasing the distance of trips from India from 4,000 to 6,000 nautical miles, and their duration from 14 to 20 days since Houthi militants began attacking ships in November 2023. .
Major shipping companies, including Maersk, MSC, and Hapag-Lloyd, decided to stop or suspend their operations through 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 in Europe, the United States, and Britain rose to $1,500, from $600 before the tension in the Red Sea.
Profits wiped out
“Our profit margins have been wiped out as shipping costs have risen,” said Arun Kumar Garodia, chairman of the Engineering Exports Promotion Council of India, noting that most buyers are not ready to review prices.
He added that Indian exports worth at least $10 billion will be harmed in the fiscal year that ends in March 2024 due to high shipping costs and delays in delivering orders.
He said shipping companies threatened to raise shipping costs further later this week.
Exporters also said that about a quarter of this month’s exports were halted due to delays in shipping schedules.
Satya Srinivas, a senior official at the Indian Ministry of Commerce, said yesterday, Monday: “The sailing of most ships was affected and was generally postponed for a period ranging between two and three weeks due to the delay of ships that traveled longer routes.”
He added that some shipments had been suspended recently, although last December’s exports, with an estimated value of $38.45 billion, were not affected by the crisis in the Red Sea.
