New Delhi: A prolonged crisis in West Asia and the near-halt of maritime traffic through the Strait of Hormuz and other Gulf shipping routes have severely disrupted India’s export sector, with industry estimates suggesting that nearly 70 per cent of outbound shipments have been affected.
Exporters say the disruption has triggered widespread logistical challenges, including shipping delays, cargo stranded at ports and in transit, and freight rates rising by as much as 300 per cent, THBL said in a report Monday The situation has also been compounded by gas shortages impacting industrial production in some sectors.
According to trade bodies, the crisis has particularly affected shipments passing through Gulf shipping corridors that connect to the Strait of Hormuz. Around 25–30 per cent of India’s export consignments transit these routes, while another 30–40 per cent move through the Red Sea corridor, making the current disruption a major blow to the country’s trade flows.
The Gulf region is a key export destination for India. The Gulf Cooperation Council countries accounted for roughly 13 per cent of India’s total exports in FY25, valued at $56.86 billion. Among them, the United Arab Emirates alone accounted for exports worth over $36 billion, THBL said.
Exporters said the government has asked companies to identify consignments that could be diverted to alternative markets. However, many firms say this is difficult in practice as shipping lines are unwilling to take responsibility for rerouting cargo once shipments have been booked.
The engineering sector has also been significantly affected. Industry representatives said West Asia accounts for around 16 per cent of India’s engineering exports, and the disruption has severely impacted shipments to the region.
Exporters also warned that gas shortages linked to the crisis have forced some industrial furnaces to shut down, raising concerns that engineering exports in March 2026 could fall compared to March last year.
Logistics costs have surged sharply due to the disruption. Exporters estimate that overall logistics expenses have increased by 200–300 per cent, driven by longer shipping routes, war-risk and emergency fuel surcharges, rising insurance premiums, and mounting demurrage and storage charges at ports.
Industry leaders have urged authorities to closely monitor the situation and work with shipping companies and insurers to stabilise export logistics amid the continuing geopolitical uncertainty in West Asia.
