Officials said that a strategy is also in the works to divert some inventories to Australia and other countries to minimise this impact.
The commerce and industry ministry had done a stakeholder consultation on the issue on January 4 when traders, shippers, container firms and freight forwarders
said that freight and insurance costs have increased as they have to take a long route now which has led to higher turnaround time. Exports to Europe, the east coast of the US and Latin America are facing problems.
“We are doing this inter-ministerial consultation meeting based on that stakeholder consultation on what measures can be taken to deal with the issue,” said an official.
The situation around the Bab-el-Mandeb Strait, a crucial shipping route connecting the Red Sea and the Mediterranean Sea to the Indian Ocean, has escalated due to recent attacks by Yemen-based Houthi militants. Due to these attacks, the shippers are taking consignments through the Cape of Good Hope, resulting in delays of almost 14 days and also higher freight and insurance costs.
“We have started an exercise to see global imports of all countries and see where we can increase our share in those,” the official said. The data analytics wing of the commerce ministry is working on analysing the impact of the Red Sea crisis on India’s trade in value terms as India’s imports and exports are getting affected.