The Union commerce ministry has announced a high-level inter-ministerial meeting scheduled for next week, aiming to address and strategise against the challenges posed to India’s trade by the ongoing issues in the Red Sea.
As per reports, the meeting would involve senior officials from five key ministries, namely external affairs, defence, shipping, finance, and commerce.
The primary focus of the meeting is to devise strategies that would insulate India’s trade from the escalating problems around the Bab-el-Mandeb Strait. This strategic waterway connects the Red Sea and the Mediterranean Sea to the Indian Ocean and has recently witnessed heightened tensions due to attacks by Yemen-based Houthi militants.
Senior officials from the concerned ministries will deliberate on potential measures to safeguard India’s trade interests in light of these challenges. To complement these efforts, the commerce ministry has established an internal strategic group consisting of additional secretaries.
This group will actively engage in daily discussions on global issues impacting the country’s trade and formulate proactive strategies to address them.
As per government officials, “The idea of the inter-ministerial meeting is to see how we can strategize our trade so that it gets least affected in such a situation.”
The disruptions in the Red Sea have forced shippers to opt for alternative routes, particularly through the Cape of Good Hope, resulting in significant delays of nearly 14 days. Additionally, this shift has led to increased freight and insurance costs, affecting the economics of trade for various stakeholders.
A high-level meeting held on 4 January in the commerce ministry addressed the concerns of stakeholders, including traders, shippers, container firms, and freight forwarders. The stakeholders emphasised the rising costs and extended turnaround times due to the altered shipping routes.
The impact is particularly felt in exports to Europe, the east coast of the United States, and Latin America. The forthcoming inter-ministerial meeting reflects the government’s commitment to proactively tackle these challenges and ensure the resilience of India’s international trade in the face of evolving geopolitical and security scenarios.
