![Crisis Over Read Sea leads to rising import cost Crisis Over Read Sea leads to rising import cost](https://varindia.com/public/index.php/storage/news/uploads/2018/02/65c1d4287aa60.jpg)
The Red Sea crisis is causing a significant rise in import costs. The Red Sea strait is vital for 30% of global container traffic and 12% of global trade. The crisis is also having a knock-on effect on other industries, such as tourism and manufacturing.
80% of India's merchandise trade with Europe passes via the Red Sea. Major shipping lines have stopped or temporarily halted Red Sea operations, including Mursk, MSC, Hapag Lloyd. Exporters are also holding back their consignments due to high freight and surcharges.
The sailing of most of the ships has been impacted and generally postponed by 2-3 weeks as the incoming ships, with longer routes, are delayed, with this the shipping costs are rising owing to growing freight rates.
That apart, an inter-ministerial consultation, with top officials from the ministry of external affairs, defence, shipping, commerce and finance met to strategise measures to tackle the impact on trade due to the ongoing Red Sea crisis.
The real situation is :
· Growing attacks on commercial shipping vessels travelling through the Red Sea have led to increased freight costs, insurance premiums, and longer transit times.
· This is making imported goods significantly more expensive, with estimates suggesting a potential $30 billion impact on India's exports alone.
· The attacks are believed to be carried out by Iran-backed who-thi rebels, and the situation has escalated in recent months.
· Many shipping companies are now avoiding the Red Sea and taking the longer route around the Cape of Good Hope, adding to the cost and time of shipments.
It's good to know that the Indian Commerce Department is actively assessing the situation and will be releasing more detailed data soon. Having official estimates on the impact of the Red Sea crisis on Indian exports will be extremely valuable for understanding the full scope of the problem and the potential economic consequences.
It will also be helpful for understanding the broader global implications of the Red Sea crisis on trade and supply chains.
See What’s Next in Tech With the Fast Forward Newsletter
Tweets From @varindiamag
Nothing to see here - yet
When they Tweet, their Tweets will show up here.