The country's power will swell due to the inflation of the Red Sea, will the government take this step? - Newztezz Online

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Wednesday, January 17, 2024

The country's power will swell due to the inflation of the Red Sea, will the government take this step?


Expressing this apprehension, the Indian exporter has said that the government should start its own global level shipping line. Director General of Indian Exporters Organization FIEO, Ajay Sahay, raised the issue of increase in freight rates in the meeting of the Board of Trade (BOT) held under the chairmanship of Commerce and Industry Minister Piyush Goyal on Tuesday.

Due to the crisis in the Red Sea, the rates of shipping goods by sea have increased by 600 percent, which will lead to loss of international trade and will also make the common people suffer due to inflation in the country. Expressing this apprehension, the Indian exporter has said that the government should start its own global level shipping line. Director General of Indian Exporters Organization FIEO, Ajay Sahay, raised the issue of increase in freight rates in the meeting of the Board of Trade (BOT) held under the chairmanship of Commerce and Industry Minister Piyush Goyal on Tuesday. Sahay said that this is a serious issue and apart from increasing inflation in various countries, this problem will harm the global demand for goods.

Houthi rebels have launched several attacks around the Bab-el-Mandeb Strait, an important route connecting the Red Sea and the Mediterranean Sea to the Indian Ocean, which has adversely affected maritime trade through this route. To avoid possible attacks, ships have to pass through the Cape of Good Hope, the southern tip of Africa. Due to this, there is a delay of about 14-20 days in the delivery of goods and along with the freight, the insurance cost has also increased.

600 percent increase in freight rates

Sahay said that at some places freight rates have increased by up to 600 percent. In such a situation, we request to develop Indian shipping line with global reputation. FIEO Director General said that we had paid more than 80 billion dollars as transport service charges in 2021. With the country's exports moving towards the target of one trillion dollars, our freight payments will reach 200 billion dollars by the year 2030. If Indian shipping lines have 25 percent stake in this, then $50 billion can be saved.

80 percent of trade is done through the Red Sea

He said that the Indian private sector can be made a part of the development of such shipping lines because foreign shipping lines will not be able to take undue advantage of it. About 80 percent of India's trade with Europe passes through the Red Sea and a major trade with America also takes place through this route. The share of these two geographical areas in the total exports of the country is 34 percent.

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