New Delhi, Apr 15 (KNN) Exporters are bracing for significant disruptions to shipments bound for Europe as tensions escalate between Iran and Israel.

Following Iran's recent attack on Israel, logistics companies are rerouting air cargo flights to avoid Iranian airspace, leading to higher costs and longer transit times, reported ET.

The Federation of Indian Export Organisations (FIEO) projects a 10-15 per cent rise in air freight volume to Europe as shippers shift cargo from maritime routes to air transportation.

Ajay Sahai, FIEO's Director General, stated, “Air freight from India to Europe will rise 10-15 per cent. Flying time will increase because planes can't fly over Iran.”

The rerouting of flights is causing a surge in air cargo costs to Europe, which have jumped from Rs 35 per kg three months ago to around Rs 140 currently. Shipping costs have inflated by 40-60 per cent, and delays of around 20 days are expected due to the longer routes. Insurance premiums have also climbed by 15-20 per cent amid concerns over potential cargo loss from piracy or attacks in the volatile region.

The unfolding crisis in the Red Sea has already prompted a shift of traditionally sea-shipped goods like leather products to air cargo, further driving up air freight demand.

Indian engineering exporters warn that the disruptions could severely impact their business with Europe. A Kolkata-based exporter predicted, “While 40 per cent of engineering exports are for maintenance, 60 per cent are for new projects that will get impacted. We expect a 30-35 per cent reduction in new project exports to the European market.”

As the geopolitical situation remains tense, exporters find themselves in a wait-and-watch mode, closely monitoring developments that could further strain supply chains and trade flows to key markets like Europe.

(KNN Bureau)