Relying Red Sea shipping route may hit India’s overseas trade

New Delhi: India needs to work on finding alternate trade routes in the sea as heavy reliance on the Bab-el-Mandeb Strait, a key route crossing Red Sea, could impact the country's trade with the Middle East, Africa, and Europe, economic think tank GTRI said on Tuesday.

Developing alternative routes such as the deep water port in Chabahar, Iran can help the country, it said. The situation around the Bab-el-Mandeb Strait, a crucial shipping route connecting the Mediterranean Sea to the Indian Ocean, has escalated due to recent attacks by Yemen-based Houthi militants. The strait, vital for 30 per cent of global container traffic, has seen increased tensions with various incidents in 2023, including attacks and military manoeuvre by regional and global powers, the Global Trade Research Initiative (GTRI) said. It added that India, heavily reliant on this route for trade and energy (crude oil and LNG) imports, faces increased costs and security risks, prompting efforts to diversify trade routes and enhance regional maritime security cooperation.

On December 15, Houthi militants hit a Liberian-flagged ship Palatium III with an anti-ship ballistic missile and threatened to attack another with a drone at the Bab-el-Mandeb, it said. The strikes are continuing for many years but have escalated this year sharply with militants now using anti-ship ballistic missiles. To avoid attacks, most large shipping firms since December 15 have stopped using the Bab el-Mandeb straits for trade with Europe via the Red Sea and Suez Canal. The closure of this route snaps a critical trade link between Europe and India and all of Asia. The ships going to Europe will now move via a much longer route around the Cape of Good Hope, the bottom tip of Africa. This change increases voyage distances by 40 per cent and raises transportation time and cost, it said.