India’s logistics sector is closely watching developments in the Middle East as tensions rise in the Gulf, but container shipping lines say services remain unaffected for now, with no immediate spike in freight rates or war risk premiums.
Sunil Vaswani, Executive Director of the Container Shipping Lines Association, said global carriers have adapted over the years to disruptions such as COVID-19, the Red Sea crisis, and changing trade policies. “We have been deploying and redeploying our fleet depending on the scenario,” he said.
He explained that most shipping lines had already diverted routes around the Cape of Good Hope rather than through the Suez Canal due to earlier risks. “So I don’t think that is going to make much of a difference anymore,” Vaswani said. Freight rates to Europe have dropped by about 50%, and to the US by around 33% over the past year.
However, he flagged the Strait of Hormuz – a key chokepoint for oil – as an area to watch. “As of today, there is no war risk premium. But bunker costs have started to move up. It is too early to say what will happen next,” he added.
Dushyant Mulani, President of the Federation of Freight Forwarders’ Associations in India (FFFAI), echoed the uncertainty. “The Iran-Israel conflict is very volatile. The impact on logistics and trade will be clearer in the coming weeks,” he said.
He warned that any disruption in the Strait of Hormuz, which handles about 20–25% of global oil supplies, could have ripple effects. “People in the region are taking a very cautious note of it now,” said Mulani, adding that India must focus on strengthening its logistics security. “It is as important as defence or food security for our country.”
Mulani said the FFFAI is in active talks with the Commerce and Finance Ministries to assess potential trade shocks and how to absorb them. Both industry bodies agreed that while current conditions are calm, the situation remains fluid.
“Ships are still plying,” Vaswani said. But in a worst-case scenario, if vessels are hit in crossfire, war risk premiums could be imposed and services might be scaled back, he added.
