Exporters fear war may drive up logistics costs

Ships may avoid Red Sea and Suez Canal again

- MUKESH JAGOTA

THE IRAN-ISRAEL CONFLICT has worsened global trade prospects, and any further escalation in West Asia could sharply reduce global demand, as energy and other costs may surge, experts say.

The immediate fallout of the conflict that started on early Friday for India's foreign trade will be in terms of freight and insurance charges going up, director general of the Federation of Indian Export Organisations (FIEO) Ajay Sahai said. This comes after a period of calm as Red Sea routes were slowly coming back to normal.

Cargo ships had gradually returned on Red Sea routes, saving them 15-20 days while moving to the US and Europe from India and other parts of Asia. "The ships will again avoid the Red Sea and Suez Canal, which will lead to an escalation of freight costs that will have to be borne by the trade," he said.