However, since the crisis has impacted competitors as well, India’s export performance would still largely depend on demand from key markets.
The Red Sea crisis has added up to 20 days to the travel time between the East and the West in some cases, rather than the 14 more required to cover the longer distance, due to congestion at ports, a senior official said on Monday.
However, since the crisis has impacted competitors as well, India’s export performance would still largely depend on demand from key markets. “Our competitors are also facing higher costs and therefore they are as less competitive as we are. It fairly balances everybody so ultimately it (exports) will depend on demand,” commerce secretary Sunil Barthwal said at a press conference.
“It is a global issue, it is not an India-specific issue. Let us see how global cooperation would play out.” The government has already provided a cushion to exporters by asking the Export Credit Corporation not to increase insurance rates.
On whether more relief measures are likely, the secretary said export promotion councils have been asked to immediately brief the government if they face major issues. He said, however, the councils have so far not given any ‘serious’ feedback.
In the December-January period, exporters usually face higher congestion surcharge due increased traffic on the seas. This year, the increase has been much more.
An inter-ministerial meeting on the Red Sea issue on Wednesday will see the participation of the ministries of external affairs, commerce, shipping and defence, and the department of financial services. Another meeting with exporters has been planned after that.
Around 80% of India’s merchandise trade with Europe passes through the Red Sea and substantial trade with the US also takes this route. Both geographies account for 34% of India’s total exports. The Red Sea strait is vital for 30% of global container traffic and 12% of world trade.
Source:financialexpress.com