Freight Hike By 40% Due To Arabian Sea Unrest Unnerves Indian Textile Industry

New Delhi, Dec 28 (KNN) The escalating situation over the past week, marked by attacks on merchant ships in the Arabian Sea orchestrated by Hamas-supporting Houthi rebels, has led to a 40 per cent surge in freight rates, with the likelihood of further increases, informed India’s textile traders.

The strategic Red Sea route, vital for connecting Europe and Asia, is now disrupted, compelling ships to take a longer route around Africa, adding 6,000 nautical miles and 15 extra days to transit time. 

This disruption has resulted in a significant spike in freight rates and insurance premiums, as highlighted by Badresh Dodhia, Chairman of the Synthetic and Rayon Textiles Export Promotion Council.

Given that a substantial portion of India's textile and clothing shipments traverse the Suez Canal, concerns are mounting in various sectors, especially as freight rates had recently stabilised following earlier spikes during the COVID-19 era.

Mr. Dodhia has called on the government to assist textile and clothing exporters by implementing measures like higher duty drawbacks, leveraging schemes such as the Rebate of State and Central Taxes and Levies and Remission of Duties or Taxes on Export Products. 

This, he suggests, would aid in better managing the challenges presented by the current situation.

(KNN Bureau)