India’s exporters are grappling with soaring freight costs, severe container shortages and vessel unavailability as geopolitical tensions in West Asia continue to disrupt global shipping routes, placing additional pressure on the country’s export supply chains.
Exporters across sectors, including rice, coffee, seafood and chemicals, report significant delays and escalating logistics costs due to disruptions around the Strait of Hormuz and the continued rerouting of vessels away from the Red Sea.
According to Prem Garg, President of the Indian Rice Exporters Federation, India exports nearly 4.5 million tonnes of basmati rice annually to Iran in a normal year. However, the availability of vessels from Kandla and Mumbai to Iranian ports has become extremely limited.
“It is difficult for ships to pass through the Strait of Hormuz now. Availability of vessels from Kandla or Mumbai to Iran is very poor,” Garg said, adding that booking a 20-foot container carrying 26.5 tonnes of rice now costs around US$5,000, with no certainty over vessel schedules.
The logistics disruption has also resulted in an acute shortage of empty containers.
R. Rajeshkumar, President of the Customs Broker and Shipping Agents Association, Coimbatore, cited a recent shipment where a customer booked a container from Kochi to Iraq for US$1,500, but eventually had to spend nearly US$50,000 to secure an empty container after equipment became stranded at regional transshipment hubs.
Coffee exporters are facing similar challenges.
Ramesh Rajah, President of the Coffee Exporters Association of India, said most Indian coffee shipments are now being diverted around the Cape of Good Hope, bypassing the Red Sea and Suez Canal due to security concerns.
The diversion has increased voyage times by 10 to 22 days, while freight rates have surged from approximately US$1,200 per container before the crisis to nearly US$3,800. Exporters are also struggling because overseas buyers continue to insist on previously agreed freight contracts despite the sharp rise in shipping costs.
Cargo Shifts to Nhava Sheva
Exporters say the shortage of mother vessels at southern ports has accelerated the shift of cargo to Jawaharlal Nehru Port (Nhava Sheva).
P. Subramaniam, former President of the Customs Broker Association, Coimbatore, noted that freight rates from Nhava Sheva are nearly 50% lower than those from southern ports, while transit times are also shorter.
As a result, more than 40% of cargo that traditionally moved through Thoothukudi and Kochi is now being routed via Nhava Sheva.
Industry stakeholders point out that infrastructure limitations have compounded the problem. While Vizhinjam International Seaport is gradually expanding operations, connectivity challenges remain. The ₹15,000-crore Outer Harbour Project at Thoothukudi is expected to enable larger mother vessels once completed, while Vallarpadam is still working towards achieving its full potential.
Freight rates from Kochi to Jebel Ali have reportedly climbed from US$1,000–1,500 to nearly US$7,000 per container, with increases continuing almost weekly.
Structural Dependence on Foreign Shipping
Former Director General of Shipping Amitabh Kumar said India has faced five major maritime disruptions during the current decade, including:
COVID-19 pandemic
Suez Canal blockage
Russia-Ukraine conflict
Houthi attacks in the Red Sea
Strait of Hormuz tensions
He noted that container shipping operates on fixed schedules, and when vessels are forced to reroute around the Cape of Good Hope, voyage durations increase significantly, reducing effective shipping capacity.
Foreign shipping lines currently carry 90-95% of India’s containerised cargo, leaving Indian exporters vulnerable whenever global carriers redeploy vessels to more profitable trade lanes such as China-Europe and China-US routes.
Perishable exports, including seafood, are among the hardest hit, while agricultural and chemical exports continue to experience shipment delays.
Government Push for Self-Reliance
To reduce dependence on imported containers, the Government has launched a ₹10,000-crore container manufacturing programme under the Union Budget 2026-27.
The initiative achieved its first milestone earlier this month when DCM Shriram Group unveiled India’s first domestically manufactured EXIM container at Dadri for Maersk, which has subsequently placed an order for an additional 1,000 containers.
However, experts note that Indian-made containers currently cost about 20% more than Chinese containers due to higher logistics expenses associated with transporting empty containers to loading points.
In parallel, the Government has initiated plans to establish the Bharat Container Shipping Line (BCSL) through a collaboration involving the Shipping Corporation of India, Container Corporation of India, and the port authorities of JNPA, Chennai and Tuticorin.
Industry observers believe the national container carrier could improve India’s long-term shipping resilience, although significant work remains, including fleet acquisition, route planning, recruitment of experienced liner-shipping professionals and network development.
With geopolitical uncertainties persisting and freight markets remaining volatile, exporters are urging faster implementation of these initiatives to strengthen India’s maritime logistics ecosystem and reduce dependence on foreign shipping capacity.
