The attack by Houthi rebels in the Suez Canal may make the country’s exports and imports more expensive in the coming days. According to industry sources, the existing shipping companies are yet to start operations on that route, which is expected to affect the cost of transporting goods in the coming days. It may take another month for work to return to normal here.
According to industry sources, the shipping companies that boycotted the route have still not started operating on the Red Sea. According to information, the seven major companies currently operating on this route have not decided when they will start operations. An announcement in this regard may be made by the companies soon, but it may take a few more weeks for the situation to return to normal.
Currently, monitoring of this route is enhanced by 26 countries concerned. The impact is still lingering and traders fear increased costs due to transportation through alternative routes, the results of which are certainly visible.
Due to this crisis, experts are once again advising that India needs to explore alternative sea trade routes to reduce its over-dependence on the Bab-al-Mandeb Strait, the main route through the Red Sea.
According to a report by the Global Trade Research Initiative (GTRI), an economic research institute, India will have to develop alternative routes like Iran’s Chabahar port to avoid any impact on its trade with countries in West Asia, Africa and Europe.
In fact, recent attacks by Yemen’s Houthi rebels have worsened the situation around the Bab-al-Mandeb Strait, an important sea route connecting the Mediterranean Sea to the Indian Ocean. It is an important maritime trade route connecting the Mediterranean Sea and the Indian Ocean through the Red Sea and the Suez Canal.
Addressing rising costs and security risks
According to the report, tensions have increased due to isolated incidents in the waterway area, which is important for 30 percent of global container traffic. In such a situation, India, which is highly dependent on this maritime trade route, is facing increasing costs and security risks.
The closure of this route has cut off an important trade link between Europe and India and the rest of Asia. Ships bound for Europe now had to make the long journey via the ‘Cape of Good Hope’ at the tip of Africa.
Travel distance increased by 40 percent
The change increases travel distance by 40 percent, which will increase both time and cost. According to the report, India is highly dependent on the Bab-al-Mandeb Strait for its crude oil, LNG imports and trade with West Asia, Africa and Europe. Any deadlock in such a scenario could affect India’s economy and security.