India's Top Export Hubs at Risk: Hormuz Disruption Exposes Telangana, Uttarakhand, and Jammu and Kashmir

India's Exports at Risk: Strait of Hormuz Disruption

Key Highlights

• $34 billion of India's exports, approximately 8% of the total in 2024, are at high risk due to the Strait of Hormuz disruption.
• The war in West Asia has entered its fourth week, affecting trade through the strait, which is a crucial trade route for Indian exports.

States Most at Risk

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• Telangana: 33% of its outbound shipments, valued at $6.4 billion, pass through the Strait of Hormuz, with $6 billion in aircraft part exports, 64% of which are linked to the Hormuz corridor.
• Uttarakhand: 16% of its total export basket, valued at $343 million, is exposed to the disruption.
• Jammu and Kashmir: 16% of its total export basket, valued at $34 million, is exposed to the disruption.
• West Bengal: $2 billion worth of exports are vulnerable, with a high reliance on agriculture, food products, tea, and marine exports.

Sectoral Impact

• Agricultural and food products: 60-90% of exports are routed through West Asia, making farm incomes and agri-export earnings particularly vulnerable.
• Industrial products: Items such as aromatic hydrocarbons, copper wire, and aluminium oxide rely heavily on Hormuz-linked trade routes.
• Consumer goods: Export-oriented manufacturing clusters could face demand-side shocks, affecting textiles, garments, cosmetics, and processed foods.

Broader Implications

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• A prolonged war in West Asia will affect India's export earnings across sectors and regions, with smaller states facing bigger shocks.
• Large exporting states, such as Gujarat and Maharashtra, have higher absolute exposure, but their diversified baskets reduce vulnerability compared to smaller states.