India’s shipping costs are moving towards $100 billion as the ongoing conflict in West Asia disrupts maritime trade routes and drives up freight rates, adding pressure on exporters and importers.
The conflict has affected shipping through key routes in and around the Red Sea, Gulf of Oman and Strait of Hormuz, forcing carriers and vessel operators to reassess routes, insurance requirements and operating costs.
Higher risk premiums, longer voyages and elevated bunker consumption have contributed to a sharp increase in freight and related logistics expenses. For Indian businesses, the impact is being felt across sectors that depend heavily on international shipping, including engineering goods, chemicals, textiles, petroleum products and agricultural commodities.
Container shipping has also come under pressure as carriers adjust services and impose additional surcharges to cover higher operating and security costs. Exporters, particularly smaller businesses, face increased difficulty absorbing these additional expenses.
The disruption is also affecting India’s import bill, as higher freight costs add to the landed cost of crude oil, fertilisers, edible oils, machinery and other commodities. Any prolonged disruption around major maritime chokepoints could further increase logistics costs.
Industry stakeholders are closely monitoring developments because the duration of the conflict and the extent of route diversions will determine how long elevated freight rates persist.
With shipping playing a critical role in India’s international trade, the surge in maritime costs could weigh on the competitiveness of Indian exports while increasing costs for import-dependent industries. A sustained reduction in regional tensions and the restoration of normal shipping routes would be key to easing freight and logistics pressures.