Shipping rates increased by 600 percent due to Red Sea crisis, Indian shipping line necessary: Exporters
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He said that the Indian private sector can be made a part of the development of such shipping lines because foreign shipping lines will not be able to take undue advantage of it. About 80 percent of India’s trade with Europe passes through the Red Sea and a major trade with America also takes place through this route. The share of these two geographical regions in the total exports of the country is 34 percent.
Due to the crisis in the Red Sea, sea freight rates have increased by 600 percent, which will cause loss to world trade. Indian exporters have expressed their apprehension that the government should start its own global shipping line. Director General of Indian Exporters Organization FIEO, Ajay Sahay, raised the issue of freight growth in the meeting of the Board of Trade (BOT) held under the chairmanship of Commerce and Industry Minister Piyush Goyal on Tuesday. “This is a serious issue and the problem will harm global demand for goods besides increasing inflation in various countries,” Sahay said.
Houthi rebels have launched several attacks around the Bab-el-Mandeb Strait, a vital route connecting the Red Sea and the Mediterranean Sea to the Indian Ocean, which has adversely affected maritime trade through this route. To avoid possible attacks, ships have to pass through the Cape of Good Hope, the southern tip of Africa. Due to this, there is a delay of about 14-20 days in the delivery of goods and along with transportation, the insurance cost has also increased. Sahay said, “Freight rates have increased by up to 600 percent at some places. In such a situation, we request to develop globally renowned Indian shipping lines.” FIEO Director General said, ”We had paid more than 80 billion dollars as transportation service charges in 2021. With the country’s exports moving towards the target of one trillion dollars, our freight payments will reach 200 billion dollars by the year 2030.
If Indian shipping lines have 25 percent stake in this, then $50 billion can be saved.” He said that the Indian private sector can be made a part of the development of such shipping lines because foreign shipping lines will not be able to take undue advantage of it. About 80 percent of India’s trade with Europe passes through the Red Sea and a major trade with America also takes place through this route. The share of these two geographical regions in the total exports of the country is 34 percent.
Disclaimer: IndiaTheNews has not edited this news. This news has been published from PTI-language feed.
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