The government has set up an inter-ministerial group in the Ministry of Commerce and Industry to coordinate actions for addressing disruptions in shipping, imports and exports in view of the situation in West Asia.
“The inter-ministerial group which meets on a daily basis is closely monitoring the developments in West Asia to assess any vulnerabilities in our shipping, logistics, exports or even critical imports,” Commerce and Industry Minister Piyush Goyal said Tuesday.
Addressing the Post Budget Webinar on Sustaining and Strengthening Economic Growth, Goyal asked different ministries to take benefit of this facility and suggest measures to deal with the disruption to their respective sectors.
Members of the Inter-Ministerial Group for Supply Chain Resilience
The Inter-Ministerial Group for Supply Chain Resilience comprises members from Department of Financial Services, Ministry of External Affairs, Ministry of Shipping, Ports and Waterways, Ministry of Petroleum and Natural Gas and Central Board of Indirect Taxes and Customs for effective coordination, monitoring and follow-up.
In Tuesday’s meeting consultations were held with all stakeholders ministries. key logistics and trade facilitation partners to review the emerging geopolitical situation and its potential impact on India’s exports and imports.
“The government is firmly committed to enable a stable and responsive trade environment for our traders and exporters, safeguarding their interests and ensuring seamless operations,” Goyal said in a post on social media.
Approx. 170 container ships and 150 oil tankers ‘trapped’ inside Persian gulf
Following the US-Israel strikes on Iran, the conflict in West Asia has engulfed the entire region. The world’s major shipping routes pass through the region, which is also a major supplier of energy sources to the world.
Approximately 170 container ships and 150 oil tankers are currently anchored or “trapped” inside the Persian Gulf or its immediate approaches, unable to exit safely. West Asia ports are also used as transshipment hubs by Indian exporters. The conflict outbreak has also impacted loading at Indian ports due to vessel delays and route cancellations.
With no clarity on how long the conflict will last, the countries are making alternate arrangements to keep the trade flows intact.
Major shipping giants—including Maersk, MSC, Hapag-Lloyd, and CMA CGM—have officially suspended all transits through the Strait until further notice. War risk premiums for ships going through West Asian routes have gone up by 25-50%. The shipping companies have also put a war risk surcharge of $ 1,500 to $ 2,000 per 20 feet container to their charges, according to reports.