Indian exporters turn to aerial routes due to the Red Sea crisis

Due to the disruptions in Red Sea shipping routes, Indian exporters are adopting aerial routes despite the higher costs involved. Particularly, exporters from Gujarat are compelled to turn to aerial routes in order to ensure supply to their consumers and mitigate the impact on the export of various items, including textiles, engineering goods, and pharmaceuticals.

About the Red Sea

  • It is a narrow strip of water that extends from Suez, Egypt, to the Bab el-Mandeb Strait and is one of the most heavily used waterways in the world for trade.
  • Bab-el-Mandeb Strait joins the Mediterranean Sea and the Arabian Sea through the Red Sea and Suez Canal.
  • Egypt, Sudan, Eritrea, Saudi Arabia, and Yemen are situated on the coasts of the Red Sea.
  • The Red Sea route is a short route for Indian traders to reach Europe and Africa. Disruptions in this route could raise shipment costs by 25-30%, which can affect trade badly. About 50% of the revenue of the Indian pharma industry comes from exports to Europe and the US. About two-thirds of these exports take place through the waterways.

About the Suez Canal

  • It is an artificial sea-level waterway connecting the Mediterranean Sea and the Red Sea.
  • It is the shortest maritime route between Asia and Europe, and separates Asia and Africa. It provides a path for over 12% of the total trade volume of the world, particularly oil and natural gas.
  • Opened in 1869, this canal is a major source of income for Egypt.

What is the Red Sea crisis?

  • Since November 2023, the Houthi militias of Yemen have been attacking ships passing through the Red Sea. This has escalated tensions among countries taking this route for trade.
  • The Iran-supported Houthi militants have increased attacks on vessels in response to Israel’s campaign in Gaza.
  • It has compelled ships to turn to the longer route of the Cape of Good Hope, travelling an additional distance of over 6,000 km via this route. This is time-consuming as well as expensive.
  • This has impacted Indian traders as well as traders from other countries due to an unexpected increase in costs and time.

Leave a Comment

Read More

1
Default choosing

Did you like our plugin?