The story so far: A spate of attacks on cargo ships in the Red Sea since November by the Houthi militia of Yemen has turned the quickest marine route linking Asia with Europe through the Suez Canal unsafe. It has forced freighters to take a longer transit around the Cape of Good Hope in Africa’s southern tip, making shipments both dearer and longer to deliver. It has compounded the woes of global trade as it emerges from the aftermath of the pandemic, feels the heat of the Russia-Ukraine war and grapples with a global economic slowdown.
What is the impact on Indian trade flowing through the Red Sea?
After the attacks, major cargo shipping lines decided they would not operate on this route. Even small feeder vessels have of late stopped plying in these waters. Almost 90% of western hemisphere cargo, both inbound or shipped from India, that used to go through the Red Sea is now getting re-routed through the Cape of Good Hope, according to the Federation of Indian Export Organisations’ Director-General Ajay Sahai. Whether exporting to Europe, the U.S. east coast and even to countries in North Africa, the longer route is being used. The remaining 10% of Indian import or export cargo is either not moving or using a transit facility.
