Govt officials, exporters to discuss Red Sea crisis issue on March 8

The official said this would be the third meeting on the issue.

Since November, Yemen-based Houthi rebels have targeted ships in the Red Sea and surrounding waters over the Israel-Hamas war.

In December, the situation around the Bab-el-Mandeb Strait, a crucial shipping route for traders connecting the Red Sea and the Mediterranean Sea to the Indian Ocean, escalated due to these attacks.

Because of this, the shipping costs have jumped and consignments are taking more time to reach Europe and the US as the ships are taking the Cape of Good Hope route, encircling Africa. Longer routes are resulting in delays of about 14-20 days and also higher freight and insurance costs.

Representatives from ministries including finance, shipping and external affairs are expected to attend the meeting on March 8. An official of an exporters body said they would flag the issue of high transportation cost in the discussions.

“We also want smooth flow of credit for exporters as it would help deal with the crisis,” the official said.

Commerce Secretary Sunil Barthwal will chair the meeting.

Commerce and Industry Minister Piyush Goyal is also expected to meet exporters on March 8 and review progress of exports.

The exporting community has urged the commerce ministry to intervene in freight rates as the shippers are charging huge amounts due to the Red Sea crisis.

The commerce ministry had earlier said they have asked the ECGC not to increase the export credit interest rates. State-owned ECGC is an export promotion organisation, seeking improvement in the competitiveness of Indian exporters by providing them with credit insurance covers.

Exports during April-January this fiscal dipped by 4.89 per cent to USD 353.92 billion. Imports contracted by 6.71 per cent to USD 561.12 billion, leaving a trade deficit of USD 207.2 billion in the ten-month period of this fiscal as against USD 229.37 billion in April-January 2022-23.