1 week ago

West Asia War Raises Costs and Complicates India’s Logistics

A war near important shipping routes is making it harder and more expensive to move goods.

Some ships cannot safely use the Strait of Hormuz, Red Sea or Suez routes.

Many vessels are taking a much longer path around Africa.

This makes deliveries slower and raises shipping and insurance bills.

Businesses are keeping extra goods in storage so they are not caught without supplies.

They are also finding backup routes and using trains, roads and technology.

Small businesses have less money to handle these extra costs.

Experts say companies and the government must build supply chains that can keep working during future disruptions.

Key facts

Working-capital increase: Indian exporters’ requirements have risen by around 15-25%.
Insurance premiums: Rates increased from roughly 0.15-0.25% to 7.5-12.5%.
Container surcharge: Freight costs increased by approximately $2,000-$4,000 per container.
Safety stock: Companies are maintaining about 15-30% additional inventory.
Resilience cost: Diversified supply chains can cost about 15-20% more, rising to 30-35% depending on complexity.
Affected sectors: Perishables, textiles, garments, apparel, some engineering goods, chemicals and agricultural exports are particularly vulnerable.
Current shipping conditions: Freight rates and insurance premiums remain elevated, while Red Sea and Suez routes continue to be avoided because of attack risks.

deccanchronicle.com · 1 week ago