Shipping Delays Shake Exports

From Aluminium To Alphonso Mangoes: West Asia Tensions Are Paralysing India’s Export Engines

By Zinal Dedhia

What?

For years, the Gulf has been a steady market for Anirudha Agrawal. From his base in Kolkata, the director of Manaksia Aluminium Company regularly shipped aluminium products to the UAE, building a business that clocked annual exports worth millions of dollars. But the current tensions in West Asia have suddenly thrown that trade into uncertainty.

The disruption comes at a time when the United Arab Emirates has emerged as one of India’s most important export destinations. India’s exports to the UAE were worth about $36–37 billion in 2024, making it the country’s second-largest export market and third-largest trading partner overall.

“Fifteen to 20 million dollars annually was my export to the UAE,” Agrawal said, describing how the Gulf market had become a key destination for his company’s products.

Now, even shipments that have already left Indian ports are caught in the disruption. According to Agrawal, aluminium coils and sheets worth about $2 million are currently in transit, but their journey has become far more complicated.

“We have received feedback from the shipping line DP World that they will take the goods via Khor Fakkan or Fujairah, the port before the Strait of Hormuz. Since they are focusing on essentials first, our products will reach with a delay of 15–20 days,” he said.

The uncertainty does not end there.

Why?

Industry bodies said Agrawal’s experience reflects a wider disruption unfolding across India’s export sector as shipping routes and schedules are altered due to tensions in West Asia.

“The export has definitely been impacted. We are seeing a challenge not only for export to the Middle East, but even export to other destinations is facing a challenge because if the ship has to go through a longer route, it entails a cost and the frequency of sailing is likely to be impacted,” Ajay Sahai, director general of the Federation of Indian Export Organisations (FIEO) told The Core.

For shipments headed specifically to West Asia, exporters are increasingly relying on indirect routes. Some cargo is now being transported only to intermediary ports before being moved further through other modes.

With shipments delayed, costs rising and orders slowing, how far will the West Asia crisis ripple through India’s export economy?

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$27.1 billion

That's how much India’s merchandise trade deficit narrowed to in February, down from $34.68 billion in January as imports eased. While the dip offers temporary relief, Trade Secretary Rajesh Agrawal warned that the Strait of Hormuz blockade is stalling shipments of LNG and fertilizers.

The Lead: With nearly $100 billion in annual regional trade at risk, the government is considering support measures for hit exporters.

Setting: On the global front, a US Supreme Court ruling against broad tariffs boosted Indian textile and food exports to $6.83 billion. However, a planned trade deal with the US has been delayed as policymakers analyze new US investigations into industrial capacity. Agrawal maintained there is no standoff, noting that the agreement will proceed once the US finalise its new tariff structure.

Fuel Flows Intact, Says Govt

Government officials on Monday continued to maintain that India has regular supplies of petrol, diesel, and LPG despite the escalating West Asia conflict. To bolster energy security, domestic LPG production has been ramped up by 36% nationwide. Separately, Gujarat announced a 20% increase in weekly LPG distribution, while prioritising PNG connections.

Overview: The regional crisis, centred on the blockade of the Strait of Hormuz, has forced Saudi Aramco to offer customers alternative crude allocations via the Red Sea port of Yanbu. Despite these efforts, India’s industrial sector faces significant strain; JSW Steel and other major producers report critical gas shortages, with some units nearing shutdown as Petronet LNG declares force majeure.

Setup: The Indian Steel Association is now urging the government to fast-track subsidised imports from non-West Asia sources to protect domestic supply chains.

West Asia Crisis Update

Iran has asked India to release three tankers that the latter seized in February, sources told Reuters. This is reportedly a part of talks to allow Indian flagged or India bound vessels to pass through the Strait of Hormuz. Iran allowed safe passage for at least two India-flagged LPG carriers, Shivalik and Nanda Devi, carrying about 92,000 tonnes of cargo. Iran has also reportedly asked for some medicines and medical equipment.

Context: The conflict between the United States, Israel and Iran has intensified, with fresh strikes and regional spillovers across the Gulf. 

Israeli forces launched new attacks on Iranian military infrastructure in cities including Tehran, while Iran and allied groups responded with missile and drone launches across the region. 

Fast Facts: Air defences in the United Arab Emirates intercepted several threats, and a drone strike near Dubai International Airport disrupted operations, forcing airlines to reroute or cancel flights, with Emirates suspending several services to and from Dubai.

Impact: India’s Ministry of External Affairs said it has helped over 550 Indians to exit Iran through Armenia. It’s also maintaining contact with governments involved, including Iran, the US, Israel and Gulf states, to ensure maritime safety and assist Indian citizens leaving the region. 

Trade Pact On Hold

India will sign its proposed trade agreement with the United States only after Washington finalises a new tariff framework, Commerce Secretary Rajesh Agrawal told reporters. Negotiators from both countries have already agreed on the broad contours of the deal, but uncertainty around US tariff policy has delayed the signing.

The Lead: The uncertainty follows a recent US Supreme Court ruling that struck down the sweeping Liberation Day tariffs imposed by President Donald Trump under emergency economic powers, saying the law did not authorise such duties.

Turning Point: After the ruling, the Trump administration introduced temporary tariffs of 10% and began designing a new global tariff architecture. India says it wants clarity on those rates before signing the pact because tariffs will determine the competitiveness of Indian exports in the US market.

IndiGo Faces CCI Probe

The Competition Commission of India has ordered an investigation into InterGlobe Aviation, parent of IndiGo, over alleged abuse of dominant position in India’s domestic aviation market. The Corporate Affairs Ministry informed the Lok Sabha that the probe began after allegations of anti-competitive practices.

Highlight: Minister of State Harsh Malhotra said the regulator directs its investigation arm, the Director General, to examine cases when a prima facie violation under the Competition Act is found. In the case filed by Kartikeya Rawal against InterGlobe Aviation, the CCI ordered a detailed probe under Section 26(1).

What’s Next? Separately, the Ministry of Civil Aviation imposed temporary airfare caps during December 2025 disruptions, directing airlines to control fares, process refunds promptly, and allow rescheduling without extra charges.

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Markets Snap A Three Day Run

On Episode 824 of The Core Report, financial journalist Govindraj Ethiraj talks to Dr. Ashish Lele, Director at CSIR-National Chemical Laboratory as well as Amit Kumar Sharma, Head – Americas at VFS Global.

• The Iran war reaches a fresh turning point as the US attempts to drag other countries into the mix falters.

• Markets snap a three day run, rise on value buying.

• Indian refineries are running at full steam and gas supplies are inching up, says the Government.

• Can India’s domestic answer to LPG, the DME, make up for shortages?

• A view from visa services provider VFS on how travel has been impacted by the war