The commerce ministry has called a high-level inter-ministerial meeting on January 17 to discuss the way forward on the trade front in the wake of the ongoing problems in the Red Sea, a senior official said on Saturday.
Senior officials from five ministries — external affairs, defence, shipping and finance (department of financial services) and commerce — will participate in the talks.
The commerce ministry has also set up an internal strategic group, comprising additional secretaries of the ministry, to discuss global issues impacting the country’s trade on a daily basis and prepare a strategy so that India’s response can be quick and decisive.
“This Wednesday, we are holding an inter-ministerial consultation. We will be discussing the way forward,” the official said.
The situation around the Bab-el-Mandeb Strait, a crucial shipping route connecting the Red Sea and the Mediterranean Sea to the Indian Ocean, has escalated due to recent attacks by Yemen-based Houthi militants.
Due to these attacks, the shippers are taking consignments through the Cape of Good Hope, resulting in delays of almost 14 days and also higher freight and insurance costs.
New trade routes are also being considered and “we will keep exploring our options if the problems at Red Sea escalate,” the commerce ministry official added.
The issues being faced by the stakeholders concerned were discussed at a high-level meeting in the commerce ministry on January 4.
Stakeholders, including traders, shippers, container firms, and freight forwarders were present in the meeting.
Exporters are apprehensive that the crisis may cause some trade disruption because the cost of moving it around becomes expensive.
“We are watching the situation very closely. There is some cost implication for our exports, but since there are inventories for almost a month only, if it escalates for long then it will be a major problem. We are worried,” the official added.
The commerce ministry has also asked the ECGC not to increase the export credit interest rates.
