Indian Exports Through the Strait of Hormuz Face Uncertainty Amid Global Disruptions

India's Exports to Strait of Hormuz-Linked Countries at Risk

A recent analysis by Moneycontrol reveals that less than a tenth of India's exports to countries linked to the Strait of Hormuz may face difficulty finding alternative markets in the event of prolonged disruption. The assessment comes amid rising geopolitical risks following the Iran-US conflict.

India exported goods worth $62.4 billion to economies linked to the Strait of Hormuz in 2024, with only around $5.3 billion, or less than 10 percent, of these exports potentially facing significant challenges in being redirected elsewhere. The remainder, valued at $57.1 billion, could be absorbed by markets such as the European Union, the US, ASEAN, the UK, and others.

Exposure of Key Commodities

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Among the most exposed categories is rice, with over $4 billion of Indian rice exports headed to the region. Rice growers may face the sharpest disruption if Gulf demand weakens and rerouting proves difficult. Other vulnerable commodities include goats, cardamom, and copra, with around $291 million worth of goods at risk due to heavy dependence on Gulf buyers and limited alternative demand.

Redistribution of Exports

Countries linked to the Strait accounted for 76 percent of India's total cardamom exports, worth nearly $200 million, while unworked diamonds worth $53 million, or around 70 percent of India's total exports in that category, were also routed to these markets. The European Union alone has the capacity to absorb nearly 90 percent of India's exports previously destined for these countries.

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Alternative Markets for Exports

Even in categories where India was completely dependent on West Asian countries, exports could be accommodated by other nations. India's largest export to Strait-linked nations, with more than 60 percent dependence in 2024, was aircraft parts, valued at $3.8 billion. The analysis indicates that ASEAN, the EU, the UK, and the US all have sufficient import demand to absorb such shipments.

Similarly, India's $1 billion ink exports, currently concentrated in Middle Eastern markets, could be redirected to Europe, while $5.38 billion worth of jewellery exports could also find buyers in the EU.