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NEW DELHI: The commerce ministry on Thursday scheduled a high-level inter-ministerial meeting next week to discuss measures to protect India’s trade from the ongoing issues in the Red Sea, according to a senior official.
The meeting will involve senior officials from the ministries of external affairs, defence, shipping, finance, and commerce.
In addition, the commerce ministry has formed an internal strategic group comprising additional secretaries to address global issues affecting the country’s trade and develop a strategy to tackle them on a daily basis.
“The purpose of the inter-ministerial meeting is to strategize our trade in a way that minimizes the impact in such a situation,” the official said.
The situation surrounding the Bab-el-Mandeb Strait, a vital shipping route connecting the Red Sea and the Indian Ocean, has worsened due to recent attacks by Houthi militants in Yemen.
As a result, shippers are now taking longer routes through the Cape of Good Hope, resulting in delays of up to 14 days and increased freight and insurance costs.
The challenges faced by stakeholders were discussed in a high-level meeting at the commerce ministry on January 4, which included traders, shippers, container firms, and freight forwarders.
“Based on the stakeholder consultation meeting, we are organizing this inter-ministerial consultation to explore measures to address the problem,” the official said.
Stakeholders have reported increased freight and insurance costs due to the longer route, resulting in longer turnaround times. Exporters to Europe, the east coast of the US, and Latin America are particularly affected.
The formation of the strategic group is crucial as the government needs to make strategic decisions during times of war and conflict.
“The group meets every morning to discuss global issues, and I have instructed them to develop a strategy. They are also focusing on the Red Sea region,” the official added.
Moreover, the ministry is exploring ways to increase exports to countries like Australia, with whom India has an interim free trade agreement.
“We are examining global imports of all countries to identify opportunities to enhance our share,” the official stated.
The commerce ministry’s data analytics wing is analyzing the impact of the Red Sea crisis on India’s trade in terms of value.
Due to the attacks, shipping lines have reduced their movement through the Red Sea and opted for the longer Cape of Good Hope route around Africa.
The increase in freight rates varies depending on the route, with additional surcharges adding to the costs.
The Bab-el-Mandeb Strait, the Suez Canal, and the Red Sea route is shorter and faster than the Cape of Good Hope route, making it the preferred option for most shipping companies.
This route starts from major Indian ports like Mumbai, JNPT, or Chennai, heads westward through the Arabian Sea, enters the Red Sea, passes through the Suez Canal into the Mediterranean Sea, and reaches various European ports.
The Cape of Good Hope route, although longer and slower, is used for bulk cargo shipments and when concerns about political instability in the Middle East arise.
(With inputs from PTI)
The meeting will involve senior officials from the ministries of external affairs, defence, shipping, finance, and commerce.
In addition, the commerce ministry has formed an internal strategic group comprising additional secretaries to address global issues affecting the country’s trade and develop a strategy to tackle them on a daily basis.
“The purpose of the inter-ministerial meeting is to strategize our trade in a way that minimizes the impact in such a situation,” the official said.
The situation surrounding the Bab-el-Mandeb Strait, a vital shipping route connecting the Red Sea and the Indian Ocean, has worsened due to recent attacks by Houthi militants in Yemen.
As a result, shippers are now taking longer routes through the Cape of Good Hope, resulting in delays of up to 14 days and increased freight and insurance costs.
The challenges faced by stakeholders were discussed in a high-level meeting at the commerce ministry on January 4, which included traders, shippers, container firms, and freight forwarders.
“Based on the stakeholder consultation meeting, we are organizing this inter-ministerial consultation to explore measures to address the problem,” the official said.
Stakeholders have reported increased freight and insurance costs due to the longer route, resulting in longer turnaround times. Exporters to Europe, the east coast of the US, and Latin America are particularly affected.
The formation of the strategic group is crucial as the government needs to make strategic decisions during times of war and conflict.
“The group meets every morning to discuss global issues, and I have instructed them to develop a strategy. They are also focusing on the Red Sea region,” the official added.
Moreover, the ministry is exploring ways to increase exports to countries like Australia, with whom India has an interim free trade agreement.
“We are examining global imports of all countries to identify opportunities to enhance our share,” the official stated.
The commerce ministry’s data analytics wing is analyzing the impact of the Red Sea crisis on India’s trade in terms of value.
Due to the attacks, shipping lines have reduced their movement through the Red Sea and opted for the longer Cape of Good Hope route around Africa.
The increase in freight rates varies depending on the route, with additional surcharges adding to the costs.
The Bab-el-Mandeb Strait, the Suez Canal, and the Red Sea route is shorter and faster than the Cape of Good Hope route, making it the preferred option for most shipping companies.
This route starts from major Indian ports like Mumbai, JNPT, or Chennai, heads westward through the Arabian Sea, enters the Red Sea, passes through the Suez Canal into the Mediterranean Sea, and reaches various European ports.
The Cape of Good Hope route, although longer and slower, is used for bulk cargo shipments and when concerns about political instability in the Middle East arise.
(With inputs from PTI)
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