Ceramic exporters, particularly from Gujarat’s Morbi hub, are grappling with mounting losses as shipping lines impose a steep war risk surcharge (WRS) on cargo bound for the Gulf amid the ongoing West Asia conflict.
Exporters say the surcharge—ranging between $1,500 and $2,000 per container—is being levied on consignments already in transit or scheduled for shipment, significantly raising logistics costs and eroding margins.
Industry players have termed the surcharge “disproportionate,” warning that it could push total losses on existing orders into crores of rupees. In several cases, exporters who had shipped goods before the conflict are now being asked to bear additional charges, despite contracts being finalised earlier.
The crisis is compounded by cargo disruptions in the Strait of Hormuz, which have forced shipping lines to reroute vessels and adjust operations, triggering higher freight, insurance, and risk-related costs.
Exporters also face the risk of buyers refusing to absorb the added costs. If overseas clients decline delivery at revised prices, exporters may have to bear not only the surcharge but also return freight, further deepening losses.
The impact is already visible on the ground. Hundreds of containers have been delayed, cancelled, or returned, with exporters reporting losses of tens of thousands of rupees per container even before the surcharge is applied.
The ceramic industry—valued at around ₹53,000 crore and heavily dependent on exports to West Asia—is simultaneously battling fuel shortages, production disruptions, and rising freight costs, putting additional pressure on profitability.
Exporters have appealed to the government for intervention, seeking relief from what they describe as an unfair cost burden during an already volatile period for global trade.