India needs to treat maritime insecurity as a persistent trade risk and strengthen its domestic shipping capacity, trade finance, naval protection and alternative transport corridors, according to economic think tank Global Trade Research Initiative (GTRI). The recommendation comes as disruptions at key maritime chokepoints continue to affect global trade and raise costs for Indian exporters.
The Red Sea crisis has now crossed the 1,000-day mark without a durable resolution. The prolonged disruption has demonstrated that while military measures may help intercept threats, restoring commercial confidence and normal shipping patterns can take considerably longer.
The Red Sea and the Bab el-Mandeb Strait form an important maritime link between the Indian Ocean and the Mediterranean through the Suez Canal. The route is particularly important for India because a large share of its trade with Europe and other western markets traditionally moves through this corridor.
Since attacks on commercial vessels intensified in late 2023, several major shipping lines have diverted vessels around the Cape of Good Hope. The longer route adds thousands of nautical miles to voyages, increasing fuel consumption, transit times, insurance premiums and inventory costs. GTRI estimates that Suez Canal traffic remains 60–70% below pre-crisis levels, while diversions around Africa absorb an estimated 5–7% of global container capacity and add roughly 10–14 days to many voyages.
Freight rates have also remained significantly above normal levels. According to the assessment, rates are around 25–40% higher than normal, while vessels operating through affected areas continue to face additional war-risk insurance costs. Some routes experienced much sharper increases during the most severe phases of the disruption.
The impact is particularly pronounced for Indian MSME exporters, which often operate on relatively narrow margins. Higher freight and insurance costs can directly reduce competitiveness, while longer transit times can delay payments and tie up working capital for additional weeks.
Products such as garments, engineering goods, chemicals, leather, carpets, rice, spices, grapes and marine products are among the categories that can face pressure when logistics costs rise sharply. For smaller exporters, absorbing prolonged increases in transportation and inventory costs can be considerably more difficult than for larger corporations.
The prolonged Red Sea disruption therefore offers a broader lesson for India’s trade strategy: maritime connectivity is also an economic-security issue. With a substantial portion of India’s international merchandise trade dependent on sea routes, the resilience of shipping networks directly affects exporters, importers, energy supplies and industrial supply chains.
The 1,000-day milestone underscores that geopolitical disruptions to shipping can outlast normal business cycles and short-term government support measures. For India, strengthening its own shipping capabilities while developing stronger maritime security and alternative logistics corridors could become increasingly important to protect trade competitiveness in an era of recurring geopolitical uncertainty.
