Red Sea Crisis: RBI, Irdai Called in to monitor and help Limit Impact on Indian Exports and help Indian exporters deal with trade disruptions

A government official said, “After our deliberations with the commerce ministry and other stakeholders, including exporters, it was decided that sectoral regulators will keep a watch and take necessary action, wherever possible.” The official added that banks have been briefed separately to factor in such hikes while sanctioning fresh credit limits to exporters and other businesses.

According to officials, the Red Sea crisis has had minimal impact on India’s exports. Shipments from India remain unaffected as vessels transporting containers from the country have been rerouted through the Cape of Good Hope, ensuring uninterrupted trade flow.

The Houthis, who initially targeted ships associated with Israel, have expanded their attacks to vessels from nations supporting Israel. Consequently, major shipping firms are rerouting their ships from the Suez Canal to the Cape of Good Hope, leading to escalated freight and transportation costs. For instance, between the end of October last year and January this year, the Shanghai Containerised Freight Index (SCFI), a key indicator for global container trends, soared by more than 1,000 points.