Red Sea crisis hurts India's petroleum product exports

Outbound petro shipments contributed $57 billion to India's coffers in FY23

- S DINAKAR

The intensifying conflict in the Red Sea has started taking a toll on India's overseas sales of petroleum products, a key contributor to India's export growth after several ships were forced to take a much longer route to deliver fuels to western markets, according to shipping data and industry officials. The hit, from attacks by Yemen-based Houthi rebels on ships using the Red Sea route to supply oil, is sizeable on sales of diesel to Europe, which accounts for over a quarter of India's total fuel exports in volume terms.

The disruption in Indian supplies of transport fuels to western nations has also given competitors an opportunity to supply European markets. The importance of India's fuel exports to the Indian economy cannot be understated. Petroleum product exports contributed $57.3 billion to India's coffers in FY23, around 12.7 per cent of India's total exports by value, according to oil ministry data. Indian refiners led by Reliance Industries earned $35.7 billion in the April-December period of this FY.