India is preparing to expand shipping capacity to West Asian destinations after exporters reported a steep rise in freight costs following the ongoing regional conflict. Industry representatives say the disruption has led to higher container charges, air freight rates and insurance costs, affecting trade flows.
To address the situation, authorities and export bodies have agreed to increase the number of smaller vessels operating between India and Gulf markets from mid-April.
Exporters have reported a sharp rise in shipping costs following tensions and military developments in the West Asia region. According to industry representatives, sea freight charges have increased significantly due to additional surcharges imposed by international shipping companies.
These surcharges are linked to higher operational risks in the region, leading shipping operators to factor in contingency costs.
During discussions with officials from the Directorate General of Shipping, exporters highlighted operational challenges caused by the situation. Around 400 exporters reportedly participated in the meeting to outline the difficulties faced in transporting goods to West Asian markets.
The conflict has affected container movement and availability, leading to delays and higher logistics expenses for Indian exporters.
To address the situation, it has been decided to increase the number of Non-Vessel Operating Common Carriers (NVOCCs) operating between India and West Asian countries from April 15.
The move is expected to provide additional capacity for shipments and help clear pending consignments destined for Gulf markets.
In addition to rising sea freight costs, air cargo rates have also increased. Exporters noted that air freight charges between Kolkata and Middle Eastern destinations have risen sharply.
Rates that were previously around ₹190 per kilogram have reportedly increased to approximately ₹430 per kilogram, adding to the logistics burden for exporters relying on air transport.
Exporters have also raised concerns related to payment delays caused by the disruption in trade flows. Delayed payments can create challenges for companies relying on interest subvention schemes.
Industry representatives have approached the Reserve Bank of India seeking support on issues such as penal interest charged by banks when export payments are delayed due to circumstances beyond exporters’ control.
Exporters have also requested the government to issue an advisory recognising the disruption as a force majeure-type situation. Such recognition could help exporters avoid contractual penalties for delays in shipments.
The conflict has affected multiple aspects of trade logistics, including freight charges, container availability and insurance premiums.
West Asia remains an important export destination for India. Trade with economies in the region accounted for exports worth around USD 58.8 billion in the financial year 2024-25.
Given the scale of trade, logistics disruptions in the region can have implications for exporters across several sectors.
Read More: Government Holds Petrol and Diesel Prices Steady Despite Crude Oil Crossing $100 per Barrel.
The decision to increase small vessel operations between India and West Asia reflects efforts to manage logistics challenges arising from the ongoing regional conflict.
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Published on: Mar 10, 2026, 2:14 PM IST
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