Middle East conflict: Exporters fear rise in logistics, insurance costs, impact on shipments

Key Highlights

• Federation of Indian Export Organisations (FIEO) President SC Ralhan said the ongoing conflict has already begun to disrupt established global logistics channels.
• “Air routes are being altered, and maritime trade through the Red Sea and key Gulf straits faces heightened uncertainty.
• If diversions become prolonged, shipments may increasingly have to reroute via the Cape of Good Hope, adding an estimated 15–20 days to transit time for Europe and the United States,” Ralhan said.
• In addition, he said, heightened geopolitical risk typically results in higher marine insurance premiums, further adding to transaction costs for exporters.
• “A prolonged disruption could also exert upward pressure on global energy prices, with consequential implications for input costs and currency stability, including pressure on the Rupee,” Ralhan said.