Kolkata | Pune: Impact of Middle East Tensions on Indian Exports
Exports of rice, tea, and fruits from India to Africa and West Asia are expected to face significant challenges due to the recent military actions between the US and Israel, and Israel’s response to Iran. This conflict is causing concerns for maritime trade, particularly in the Red Sea and the Strait of Hormuz, which could affect the delivery of various goods, including textiles, to Western markets.
Ajay Sahai, the director-general of the Federation of Indian Export Organisations, mentioned, “Shipping through the Red Sea and Strait of Hormuz will be affected, forcing goods to take a longer route via the Cape of Good Hope. This alternative route could delay shipments by 15 to 20 days.” He also noted that freight rates will likely rise and insurance costs may increase as a result of the situation. Sahai expressed concern about how long these tensions will last, warning that prolonged issues could put pressure on the Indian rupee and lead to a rise in the dollar’s value.
The Middle East and Africa are key markets for India’s basmati and non-basmati rice, as well as premium orthodox tea. Mohit Agarwal, director of Asian Tea, which exports to West Asia including Iran, stated, “Shipments to the region could halt due to the escalating tensions between Iran and Israel.”
Furthermore, the Indian Rice Exporters Federation’s vice-president, Dev Garg, shared that in the first ten months of the current fiscal year, the Middle East imported basmati rice worth ₹31,533 crore and non-basmati rice worth ₹5,212 crore. “The heightened tension has created uncertainty for exports to these areas. We will reach out to our buyers on Monday to gauge the situation,” he added.
As the situation unfolds, the effects on trade and shipping lines remain to be seen, highlighting the interconnectedness of global economies.
