India could announce support measures for exports amid West Asia War

The Indian government is preparing a series of measures to bolster exports as the escalating conflict in West Asia disrupts global trade routes and logistics, Commerce Secretary Rajesh Agarwal has said.

The ongoing war, involving strikes between Iran, Israel, and the United States, has led to significant challenges for Indian exporters, particularly those reliant on maritime and air shipments to West Asia and beyond. Key routes through the Strait of Hormuz and the Red Sea face heightened risks, prompting rerouting, higher freight costs, and delays.

"There are logistical challenges that are being faced. Air cargo is also facing certain challenges because of some disruptions in flights. It will have some impact. Imports from India will also suffer because they are also dependent on India for multiple categories," Agarwal told reporters.

He acknowledged that disruptions pose risks, & challenges for export this month to the West Asian region.

"Both sides are engaged in finding solutions which can address some of these challenges. It may have some impact, but it will not be completely wiped out," Agarwal added.

To mitigate the effects, the government has formed an inter-ministerial group under the Directorate General of Foreign Trade (DGFT). "There are certain collaborations, certain work that we are doing by forming an interministerial group under DGFT, which meets every morning," Agarwal explained.

The group monitors developments daily, coordinates with stakeholders, and works to ensure smoother cargo movement.

Because of the conflict, the Gulf region has been impacted in a major way. The Gulf region accounts for a significant share of India's trade, with agreements like the India-UAE CEPA providing some resilience through tariff reductions.

Broader government considerations include potential relief packages. Discussions could also focus on alternative routes and supply chain adjustments to maintain continuity.