Commerce department takes stock as ongoing Red Sea crisis intensifies

Commerce Secretary on Thursday chaired a meeting of senior government officials to take a close look at the ongoing Red Sea crisis and its impact on outbound shipments from India, people aware of the matter told Business Standard.

The government has observed that disruptions at the Red Sea trade route may impact the exports of India’s premium quality basmati rice to Europe, Egypt, and parts of West Asia. If the trade takes a longer route for exports, there may be a 15-20 per cent jump in prices of basmati rice shipments.

India uses the Red Sea route to send shipments to some parts of Asia such as Egypt as well as Northern Europe to countries such as the Netherlands that may get impacted to some extent. Exporters had last month said that if the situation persists, exports of items such as petroleum products and machinery may get affected.

Since December 15, the global shipping industry has been in a state of turmoil following missile and drone attacks on two box ships by Houthi militia at the Suez Canal. It has prompted an increasing number of shipping lines to avoid the Red Sea.

About 15 per cent of world shipping traffic transits via the Suez Canal, the shortest shipping route between Europe and Asia.