With cargo flows to Jebel Ali and other major Gulf ports stalled by the Strait of Hormuz closure, New Delhi is fast‑tracking alternate air and sea corridors while extending operational and insurance support to exporters.
Hormuz Closure Hits India–Gulf Trade
The shutdown of the Strait of Hormuz has halted container and bulk cargo movements to key Gulf hubs, including Dubai’s Jebel Ali, Ras Tanura, Ras Laffan, Hamad and Khalifa ports. India’s exports to West Asia, valued at about USD 58.8 billion in 2024–25, are expected to come under pressure as traditional sea lanes remain blocked. Despite the disruption, officials underline that Gulf buyers also critically depend on Indian imports, keeping strong demand in place.
Government Activates Alternate Routes and Modes
- The Union government is working with West Asian counterparts to keep trade moving through:
- Air cargo corridors and special arrangements wherever feasible.
- Alternate regional ports such as Fujairah and Khorfakkan for diversion of India–Gulf cargo.
- Authorities in the region will determine the safest options and available capacity in terms of port logistics, trucking, warehousing and hinterland connectivity before scaling up these routes.
- Officials say shipments will continue “by air, by sea, through any viable arrangement” to maintain supply chains into key Gulf markets.
Daily Monitoring Cell for Exporter Issues
- A joint monitoring group has been set up to review the West Asia situation on a daily basis, capturing feedback from industry on:
- Port operations and charges
- Warehousing constraints
- Vessel turnaround and ships returning to India
- Exporter issues flagged through this mechanism are being taken up for swift resolution with ports, shipping lines and other agencies.
Relief for Stuck Cargo and Export Financing
The government has allowed exporters whose consignments are stranded at sea to bring cargo back to India for sale in the domestic market, or diversion to alternative overseas destinations. This flexibility is aimed at easing cash‑flow stress, freeing up inventories and reducing demurrage and storage costs for affected shippers. In parallel, measures under the Export Promotion Mission—such as interest subvention, support for use of factoring services, and assistance in entering new markets—are being positioned to cushion the impact on working capital and market access.
Focus on Insurance and Risk Mitigation
- Beyond operational fixes, the Centre is examining ways to support exporters on insurance‑linked challenges, including higher war‑risk premiums and coverage concerns on diverted routes.
- Any new insurance support will supplement already announced export‑promotion schemes, with the broader objective of preserving India’s competitiveness in West Asia despite longer routes, higher freight and elevated risk costs.
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