The cost of Indian exports has more than doubled due to the Yemeni Houthi militia's attacks on ships in the Red Sea, industry officials said on Monday.
Around 80% of India's goods trade with Europe, estimated at nearly $14 billion a month, normally passes via the Red Sea, according to government estimates.
Exporters said 95% of vessels had rerouted around the Cape of Good Hope on the southern tip of Africa, adding 4,000 to 6,000 nautical miles and 14-20 days to journeys from India since Houthi militants began attacking shipping in November.
Major shipping lines have stopped or temporarily halted Red Sea operations, including Maersk, MSC, Hapag Lloyd.
The cost of a 24-foot shipping container from India to Europe, the eastern cost of America and the UK had risen to $1,500 from $600 before the Red Sea attacks, according to four exporters including the head of an export association.
"Our profit margins have been wiped out as the shipping costs have gone up," Arun Kumar Garodia, chairman, Engineering Export Promotion Council of India (EEPC) said, noting most of the buyers were not ready to revise prices.
He said Indian exports worth at least $10 billion would be hit in the fiscal year to March 2024 due to the rising shipping costs and delay in delivery of orders.
Shipping companies have threatened to raise freight costs further later this week, Garodia said.
Exporters also said about a quarter of this month's exports are held up due to delays in shipping schedules.
"The sailing of most of the ships has been impacted and generally postponed by 2-3 weeks as the incoming ships, with longer routes, are delayed," Satya Srinivas, a senior Indian trade ministry official said on Monday.
Some recent consignments had been put on hold, although December exports, estimated at $38.45 billion, were not impacted by the Red Sea crisis, he said.
(Reuters - Reporting by Manoj Kumar; editing by Philippa Fletcher)
