FFFAI Flags War Risk Surcharges of Up to $4,000 per Container as 70% of Indian Exports Disrupted by Hormuz Crisis

India’s freight forwarding industry has sounded the alarm over what it describes as arbitrary and disproportionate War Risk Surcharges (WRS) being imposed by international container shipping lines on cargo destined for or originating from the Gulf region. The Federation of Freight Forwarders’ Associations in India (FFFAI) has written formally to the Ministry of Ports, Shipping and Waterways, demanding regulatory intervention to curb what the industry calls profiteering under the cover of geopolitical risk.

Surcharges Range from $1,500 to $4,000 per Container

According to FFFAI, War Risk Surcharges currently being levied by major global shipping lines range from USD 1,500 to USD 4,000 per container on routes touching the Persian Gulf and Arabian Sea — charges that come on top of base freight rates that have themselves surged by 30–50 per cent due to capacity shortages caused by the Hormuz closure. For exporters of low-value, high-volume commodities such as rice, textiles, and agricultural products, the additional surcharges effectively wipe out margins and in some cases make shipments commercially unviable.

FFFAI estimates that approximately 70 per cent of Indian exports have been disrupted to varying degrees, with Gulf-bound cargo and transhipment traffic through Colombo, Singapore, and Jebel Ali most severely affected.

3,000 Rice Containers Stranded

The impact is particularly acute for India’s rice export sector, which relies heavily on Gulf markets. Over 3,000 containers of rice are reported to be stranded either at Gulf ports or in transit, with buyers unable to receive cargo and Indian exporters facing storage costs, demurrage, and the risk of cargo deterioration. India is the world’s largest rice exporter, and sustained disruption to Gulf trade flows threatens its market position in key destinations including Saudi Arabia, the UAE, Kuwait, and Oman.

Commerce Ministry Considers Exporter Relief Package

Commerce Secretary Rajesh Agrawal acknowledged that March exports are likely to be ‘challenging,’ in what was an unusually candid public assessment from a senior official. The Commerce Ministry is understood to be evaluating an exporter relief package that could include extended export obligation deadlines for advance authorisation holders, temporary suspension of interest equalisation scheme conditions, and the possibility of loan moratoriums for exporters with deferred payments from Gulf-based buyers.

The package, if announced, would provide some breathing room for Indian exporters dealing with the dual shock of surging logistics costs and stalled receivables — but industry bodies are pressing for quicker action, warning that the window for intervention is narrowing as the crisis moves into its fourth week.