Red Sea Attacks Surge Indian Textile Freight Rates By 40%

The textile export sector in India is facing a severe crisis as a result of recent attacks by Hamas-supporting Houthi rebels on merchant ships in the Arabian Sea. This has led to a 40% surge in freight rates, with further increases anticipated. Bhadresh Dodhia, Chairman of the Synthetic and Rayon Textiles Export Promotion Council (SRTEPC), has urgently appealed to the government for support in the light of the escalating situation.

Dodhia highlighted the alarming repercussions of the crisis, citing substantial shipment delays and increased costs. Cargo vessels, avoiding the Red Sea due to militant attacks, are forced to take a 6,000-nautical-mile detour around Africa, adding an extra 15 days to transit times. This deviation has resulted in a sharp increase in both freight rates and insurance premiums.

Expressing serious concerns over the situation, Dodhia emphasized that attacks on ships in the Red Sea, a crucial trade route connecting Europe and Asia, are significantly affecting textile and clothing exporters. Freight rates from India to European ports have surged by 40%, posing a threat to the sustainability of operations. Dodhia urgently called on the government to provide essential support to navigate through this challenging period and ensure the continued viability of exports.

Dodhia underlined the fact that the crisis in the Red Sea has led to a surge in freight rates, despite previous stabilization post the Covid-19 pandemic. He warned that if the crisis persists without prompt containment, it not only poses a threat to Indian exports, but also stands to severely disrupt the global supply chain. This could have far-reaching consequences for the world economy.