Red Sea route crisis: Commerce ministry asks DFS to maintain credit flow to exporters

“We are monitoring the issue closely… DFS has been asked to maintain credit flow to the exporters. And what we are gathering is that the volumes from major ports are not impacted. We have asked the shipping ministry to monitor the volumes too. Time and cost will be impacted because instead of going through the Suez Canal, shipments are going through the cape of good hope,” the official said.

Freight rates to Europe have more than doubled due to security tension in the Red Sea region. Fears of disruptions in the Red Sea region have risen while oil prices have begun inching up.

According to the commerce ministry, consignments have been put on hold due to high freight and surcharges and the sailing of most of the ships have been impacted and generally postponed by two-three weeks as the incoming ships, with longer routes, are getting delayed.

Indian shipments of low-value products, such as agriculture and textiles to Europe, are primarily expected to face the impact of disruption in the Red Sea region. Earlier, the government had asked Export Credit Guarantee Corporation (ECGC) not to raise insurance premiums amid rising cost of shipping to Europe.