Indian export consignments have gradually started moving through the Red Sea route again, exporters body FIEO said on Tuesday. The gradual movement signals a cautious recovery in shipments after months of disruptions on the route caused by regional tensions.
Last year, the situation around the Bab-el-Mandeb Strait, a crucial shipping route connecting the Red Sea and the Mediterranean Sea to the Indian Ocean, escalated due to attacks by Yemen-based Houthi militants.
Due to attacks, the shippers were taking consignments through the Cape of Good Hope, encircling the African continent, resulting in delays of almost 14-20 days and higher freight and insurance costs.
“Consignments are gradually going through this important sea route. It will cut transportation time,” Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai said.
He also said freight rates have stabilised because of a dip in ship demands from China.
Around 80 per cent of India’s merchandise trade with Europe passes through the Red Sea and substantial trade with the US also takes this route. Both these geographies account for 34 per cent of the country’s total exports.
The Red Sea strait is vital for 30 per cent of global container traffic and 12 per cent of world trade. About 95 per cent of the vessels had rerouted around Cape of Good Hope adding 4,000-6,000 nautical miles and 14-20 days to journeys.