The ongoing escalation of conflict in West Asia is anticipated to significantly increase logistics costs, impacting trade across various sectors such as oil, electronics, and agriculture. Exporters are particularly concerned about rising insurance costs for shipments to affected countries, which could strain working capital for Indian exporters.
The Global Trade Research Initiative has noted a marked decline in India's trade with nations like Israel and Jordan, with exports experiencing sharp drops due to the instability in the region. As tensions continue to rise, the potential for further disruptions in crucial shipping routes looms, threatening global trade dynamics.
Citations:
[1] https://www.business-standard.com/economy/news/conflict-escalation-in-west-asia-likely-to-push-logistics-cost-up-124100200590_1.html
[2] https://www.financialexpress.com/world-news/iran-israel-war-threatens-global-shipping-routes-whats-next-for-indian-trade/3628495/
[3] https://www.dw.com/en/rising-shipping-costs-hit-global-trade-hard/a-69586965
[4] https://www.ndtvprofit.com/business/timeline-of-middle-east-and-west-asia-conflicts-and-impact-on-indias-trade
[5] https://www.newindianexpress.com/nation/2024/Sep/07/west-asia-conflict-hits-trade-flow-shipping-cost-up-eam
[6] https://www.newindianexpress.com/nation/2024/Sep/06/west-asia-conflict-disrupts-shipping-routes-raises-costs-eam-s-jaishankar
[7] https://www.pwc.com/ng/en/assets/pdf/unlocking-ngr-agric-export.pdf
[8] https://indianexpress.com/article/explained/explained-economics/export-ban-non-basmati-white-rice-lifted-why-impact-9594407/