India Stares at $30 Billion Export Hit from Red Sea Crisis: Report
India’s exports could take a $30 billion hit in the ongoing fiscal year due to spiraling shipping costs triggered by security threats to cargo vessels in the Red Sea, a think tank has warned.
The Research and Information System for Developing Countries estimates a 6.7% contraction in the country’s overall exports based on last year’s $451 billion figure.
“The crisis in the Red Sea would indeed impact India’s trade and may lead to further contraction,” said Director General Sachin Chaturvedi. The government has not released any projections yet on the crisis’ impact.
The number of ships passing through the Suez Canal has plunged 44% from early December averages, per Clarkson data. Only around 2.5 million gross tonnage traversed the vital route to Europe in the first week of January, compared to 4 million tons in early December.
The Red Sea threats have sent container shipping rates soaring globally. Indian exporters are now holding back shipments to mitigate losses, as per the think tank’s initial assessment of a major $30 billion dent.