Former Ambassador Anil Trigunayat asserts that the ongoing tensions in the Red Sea region will have a direct impact on India’s trade.
The Red Sea, a crucial maritime route, has become a focal point due to attacks by Yemen-based Houthi rebels. The global trade landscape is being adversely affected as Houthi rebels target commercial ships traversing the Suez Canal—an essential sea route connecting Asia and Europe.
“Roughly about 20% of India’s trade goes through the Red Sea route, so this is going to have a direct impact. India has also been getting Russian oil and that also uses the same route and so the cost of transportation, insurance and delays is going to impact a great deal. So tension in Red Sea is going to have a cyclical impact across various products of day to day life of Indians. The whole world is currently worried about the situation because about 40% of trade from Europe to Asia passes through this route. That is why India has been insisting on the maritime security and stability,” Anil Trigunayat stated in an interview with CNBC-TV18.
The deteriorating security situation in the Red Sea has compelled major shipping companies like Maersk, MSC, and CGM to suspend their services.
More than a hundred container ships have already been rerouted to Africa due to the attacks, adding approximately 6,000 nautical miles to the average voyage from Asia to Europe. This rerouting extends the delivery timeline by three to four weeks.
Moody’s Analytics reports that oil prices have surged by nearly $5 per barrel due to concerns about supply disruptions resulting from the increased costs and security risks associated with rerouting.
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