India Explores Options to escape Red Sea Crisis Impact on Exports/

The Central government has formed a high level committee to study the scenario and chalk out alternate trade

opportunities in markets that are insulated to the on-going  crisis the merchant navy ships face in the red sea

Shipping channel  for the last one month.

The Red Sea crisis has dampened Indian exports to the US, Europe and the Mediterranean region. In the coming

months trade with these regions is further expected to get difficult.

Especially, Indian apparel or readymade garment export volumes are already facing a decline in demand. As per the available government figures, a 15 per cent year-over-year fall in Indian RMG exports in November has been reported, aggravating from an 8 per cent drop in October.

The Red Sea crisis could only add to the demand pressure and this requires devising new strategies to push export volumes. According to them, markets like Latin America and Australia could present some growth opportunities, though incremental growth would not come quickly.

“The world is witnessing two wars and inflationary pressure all across the globe and realignment of its value chain,” said a spokesman of Apparel Export Promotion Council (AEPC). It is time for India to capture the void spaces and create new ones, we have advantages and inherent strengths to make this possible. Branding and diversification of our export’s basket is key to success.”

Meanwhile shippers have expressed concerns over rising shipping costs as a consequence of the Red Sea crisis. “Indian exporters fear that average freight costs may go up by 25 per cnet as insurance premiums may rise. This crisis can further delay our delivery schedules and increase our logistics costs, which at the moment is a pressing concern. The solution to this will surely be multilateral and multiparty participation, which the world should not delay any further.”

Apparel Exporters body has recently unveiled plans to push Indian apparel exports by value from 16-17 billion US dollars at present to 40 billion US dollars by 2030.