Indian Exporters Battle Rising Freight Costs Amidst Conflict

Indian exporters are dealing with financial strains as war-risk premiums increase freight costs due to conflicts in West Asia. To alleviate the pressure, New Delhi has launched a 4.97 billion rupees scheme to support insurance cover for shipments, stabilizing costs and avoiding order cancellations.

Indian small and medium exporters are currently grappling with financial challenges as conflict-induced premiums and surcharges send freight rates soaring. The trade ministry highlighted this issue on Thursday, noting that routes through conflict-hit West Asia have experienced steep rises in freight and insurance expenses, posing significant challenges for exporters with little room to pass on these costs.

Addressing these challenges, New Delhi unveiled a substantial 4.97 billion rupees ($53.26 million) initiative aimed at supporting insurance cover for shipments navigating these volatile corridors. The move is intended to stabilize costs and mitigate the risk of order cancellations.

This development underscores the broader challenges faced by exporters in managing unforeseen spikes in operational costs, which could have lasting impacts on their financial health and global trade competitiveness.

(With inputs from agencies.)