Freight Surge, LPG Shortage Amid West Asia Crisis Hit East India Exports

The ongoing crisis in West Asia has disrupted India’s export ecosystem, pushing freight costs up by 60–80 per cent and cutting shipments by up to 50 per cent in some sectors, industry representatives said.

Disruptions to key maritime routes have forced shipping lines to reroute cargo via longer African routes, raising transit time and costs further. According to the Calcutta Customs House Agents Association (CCHAA) , war-related surcharges, container shortages, and uncertainty in shipping schedules have compounded the crisis, leaving nearly 600 containers stranded at Kolkata port , many of which are being returned following last-minute cancellations.

Exporters say the situation is further aggravated by LPG supply constraints , which are impacting manufacturing processes, particularly in engineering goods. Industry leaders warn that sectors expecting moderate growth this fiscal may now end the year flat due to lost orders and execution delays.

While the crisis appears concentrated in trade and logistics, its effects are increasingly being felt by ordinary citizens across India. Rising freight costs are expected to translate into higher prices of imported goods , including electronics, machinery, and even certain food items.

Additionally, increased logistics expenses for exporters may lead to price pressures domestically , as businesses attempt to offset losses. The disruption in exports—especially in labour-intensive sectors like textiles, seafood, and manufacturing—also raises concerns over job security , particularly for workers in MSMEs and export-oriented units.

Delayed shipments and cancelled orders could result in reduced wages, fewer working hours, or temporary layoffs in affected industries. Air cargo disruptions, including rerouted flights and cancellations, are further pushing up costs of essential high-value goods such as medicines , potentially impacting availability and pricing.

The crisis carries significant macroeconomic risks. Higher freight and insurance costs are likely to widen India’s trade deficit , as export competitiveness declines while import bills rise. India’s dependence on West Asia for crude oil and energy supplies also makes it vulnerable to price volatility, which could lead to higher fuel costs domestically , driving inflation.

Moreover, exporters are unable to fully benefit from the depreciating rupee , as logistical bottlenecks are preventing timely execution of orders. To mitigate the impact, the government has rolled out the Rs 497-crore ‘RELIEF’ (Resilience and Logistics Intervention for Export Facilitation) scheme , implemented through the Export Credit Guarantee Corporation of India (ECGC) .

In addition, port authorities and customs bodies have introduced tariff reductions and faster clearance mechanisms , while the Jawaharlal Nehru Customs House (JNCH) has directed shipping lines to pass on relief benefits. The worst-affected sectors include engineering goods, textiles, seafood, and pharmaceuticals , and industry stakeholders remain cautious as uncertainty continues.