The deteriorating situation in the past week following Hamas-supporting Houthi rebels attacks on merchant ships in the Arabian Sea has raised freight rates by 40% with the possibility of this going up, say India’s textiles traders.
Red sea is one of the busiest trade routes that connects Europe and Asia, but the recent attacks have forced merchants ships to take the circuitous route around Africa adding an extra 6,000 nautical miles and an additional 15 days to the transit time leading to steep increase in freight rates and insurance premiums, said Badresh Dodhia, chairman of the Synthetic and Rayon Textiles Export Promotion Council.
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Most of India’s of textile and clothing shipments pass through the Suez Canal, and while freight rates had stabilised in recent months after witnessing spikes during the COVID-19 years, fears are rising in several sectors of a similar situation now.
Mr. Dodhia urged the Government to support the textile and clothing exporters with higher duty drawback on schemes like the Rebate of State and Central Taxes and Levies and Remission of Duties or Taxes on Export Products to better manage the current situation.
