Red Sea Tensions: A New Crisis for Global Trade Routes

A military confrontation in the Middle East, resulting from a joint US-Israel attack on Iran, is causing significant disruption to global trade, impacting transportation and insurance costs for Indian exporters. The conflict threatens key shipping routes, likely causing delays, increased expenses, and pressure on global energy and currency stability.

A joint military operation by the US and Israel against Iran has sparked significant unrest in the Middle East, threatening to destabilize global trade routes. The ensuing conflict poses a potentially crippling challenge to Indian exporters, who face rising transportation and insurance costs as key shipping lanes become hazardous.

The Federation of Indian Export Organisations warns that vital air routes and maritime paths through the Red Sea and Gulf straits are fraught with uncertainty. This unease might compel freight to detour via the Cape of Good Hope, extending transit times to Europe and the US by weeks and inflating costs.

As geopolitical tensions increase, marine insurance premiums are expected to rise, exacerbating financial stress for exporters. The situation is compounded by potential spikes in global energy prices, which could jeopardize market stability. Exporters urge government intervention to mitigate risks and sustain international trade amidst this crisis.

(With inputs from agencies.)