India Maintains Gulf Market Supplies Amid Escalating Tensions with Iran

Global Trade Disruption: Indian Exporters Adapt to New Routes

Key Figure: 99% - Traditional percentage of shipments moved by sea Key Figure: 1% - Traditional percentage of shipments moved by air Key Figure: 60 - Number of different items shipped by Kay Bee Exports in a single consignment Company Name: Kay Bee Exports Company Name: Lulu Group International Company Name: DP World Organization Name: Federation of Indian Export Organisations (FIEO) Location: Strait of Hormuz Date: Late February Date: March 23 Percentage: 85% - Share of food imports in the Gulf Cooperation Council (GCC) countries Percentage: 40% - Share of India's basmati rice exports Percentage: 75% - Share of India's cardamom exports Percentage: 80% - Share of India's banana exports

The conflict in the Gulf has disrupted one of the world's most critical trade corridors, forcing Indian exporters to adapt to new routes and logistics. Traditionally, 99% of shipments moved by sea and 1% by air, but the crisis has led to a significant shift, with air shipments becoming dominant despite nearly doubling in cost.

Exporters like Kay Bee Exports are improvising to keep food supplies moving to West Asia. Retailers such as Lulu Group International are also adjusting sourcing and logistics to keep shelves stocked. Federation of Indian Export Organisations (FIEO) member Khushwant Jain noted that shipments already in transit have had to be rerouted due to disruptions at key ports.

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Jebel Ali Port is currently not fully operational, prompting shipments to be diverted to nearby ports. Operators such as DP World are transporting cargo by road into the UAE and even onward to Saudi Arabia. However, Indian exporters often operate without insurance, exposing them to significant financial risk.

The crisis, which escalated in late February, has turned the Strait of Hormuz into a high-risk zone for commercial shipping. Tentative signs of de-escalation emerged after US President Donald Trump announced a five-day halt to further strikes on energy infrastructure.

The stakes are unusually high, with countries across the Gulf Cooperation Council (GCC) importing nearly 85% of their food. India is a key supplier, with 40% of its basmati rice exports, 75% of cardamom, and more than 80% of bananas shipped to markets such as the UAE, Saudi Arabia, Iraq, and Iran.

Exporters are rerouting cargo through alternative hubs, with logistics operators facilitating makeshift solutions. This has increased both costs and complexity. Khakhar noted that uneven demand across the region has led to a slight dip in demand in the UAE, but exports to Saudi Arabia and Oman have continued relatively uninterrupted.

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For perishable goods, air cargo has stepped up, and speed has become critical. Sea shipments of perishables typically take four to seven days with refrigeration, but in the current situation, exporters are relying more on air transport despite higher costs. Some airlines are exploring using passenger aircraft as cargo carriers, operating chartered flights without passengers to utilise capacity.