The exporting community said that businesses are also adjusting inventory, contracts, and schedules for flexibility.
They added that support measures, such as sharing regular advisories, engaging with shipping lines to manage surcharges, ensuring vessel/container availability, allowing flexibility in compliance timelines, and maintaining dialogue between industry bodies and government authorities, will help the domestic industry deal with this crisis.
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“Things are not improving, but we are trying to manage our exports. Shipping lines should not take undue advantage of this situation,” Federation of Indian Export Organisations (FIEO) President SC Ralhan said.
Ongoing geopolitical tensions in West Asia, especially around the Strait of Hormuz, are creating uncertainty for India’s exports, affecting shipping schedules, costs, a hike in insurance premiums and supply chains.
Exporters are monitoring the evolving situation, as surcharges and longer transit times impact cargo movement.An apparel industry expert said that export orders to the Middle Eastern region may decline over the next few months due to the ongoing war, and consumption may decline.
Around 11.8 per cent of apparel exports go to the war-affected West Asian countries, which are now directly under stress. India’s ready-made garment exports to eight countries – UAE, Saudi Arabia, Israel, Kuwait, Oman, Qatar, Iraq, Bahrain and Iran – were USD 1.9 billion in 2024-25 compared to USD 1.82 billion in 2023-24. It was USD 15.97 billion in total against USD 14.51 billion in 2023-24.
“Textile manufacturers that are dependent on imported raw materials (synthetic fabric, trimmings and embellishments, among others) may face shortages or cost escalation if disruptions continue. An increase in logistics charges could lead to an increase in the cost of raw material and lead to higher final product costing,” the expert said.
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Council for Leather Exports Chairman Ramesh Kumar Juneja said shipments to the Persian Gulf have stopped completely.
“Insurance premiums have increased. On a 20-foot container, it has increased by USD 1,200 and USD 2,400 on 40 ft,” he said.
Due to the crisis, shipping lines are rerouting shipments around the Cape of Good Hope, encircling Africa to avoid the Strait and Red Sea.
The diversions around the Cape of Good Hope add about 3,500 nautical miles, which can delay shipment by around 10-15 days, and increase fuel and insurance costs.
This would make order delivery to the US and Europe costly.
Another expert said that longer voyages by vessels may lead to a shortage of vessels in the next few weeks, thereby further increasing costs by reducing the availability of vessels and containers and pushing up rates beyond the region.