Iran-Israel conflict: Exporters push for urgent shift to Chabahar port as conflict threatens trade routes – Here’s what you need to know

Amid the escalating Iran-Israel conflict, Indian exporters have steered shifting cargo operations from Iran’s Bandar Abbas port to the India-managed Chabahar port, citing fears of a wider regional disruption that might severely impression trade with Afghanistan, Central Asia, and Russia.According to the information company PTI, the advice was made throughout a excessive-stage assembly convened by the commerce ministry on Friday to assess the fallout of the conflict on India’s trade. Commerce secretary Sunil Barthwal chaired the assembly, which was attended by representatives from the petroleum, transport, income, and monetary providers departments, as effectively as transport traces and airport authorities.An business official who attended the assembly was quoted by PTI as saying, “If Bandar Abbas port doesn’t function, it will affect exports not only to Iran but also to Afghanistan and Central Asia. We have been informed that there is adequate capacity at Chabahar, and this needs to be explored urgently.”While Iran’s Bandar Abbas port stays operational, exporters flagged that additional escalation of hostilities might block key maritime routes, notably the Strait of Hormuz, a chokepoint that handles almost a fifth of the worldwide oil trade. The slim 21-mile-extensive waterway is important to India, which depends on it for over 80 per cent of its vitality imports.The Federation of Indian Export Organisations (FIEO) confirmed it could quickly maintain consultations with Chabahar port authorities. “We will enquire about the facilities at the port,” a senior FIEO official stated, noting {that a} remaining choice would relaxation with the transport traces, whereas DG Shipping would additionally evaluate the feasibility.Exporters additionally raised considerations over a pointy rise in freight fees. Air freight charges have already jumped 15 per cent, whereas ocean freight to Europe and Mediterranean ports has surged by $1,000 per TEU (twenty-foot equal unit). The price of transporting a 20-foot container has additionally gone up by $500–600. Many consumers have paused orders, and exporters are delaying shipments, fearing that items could get stranded at ports, main to heavy demurrage fees.India’s exports to Israel have already declined from $4.5 billion in FY24 to $2.1 billion in FY25, and imports have additionally dipped. Trade with Iran stays flat at $1.4 billion, however exporters fear the continued conflict might additional harm these fragile trade ties. Basmati rice exports to Iran have reportedly halted, and transport to the Middle East has change into dearer.If entry to the Strait of Hormuz is impacted, India could have to take into account alternate routes through Fujairah port within the UAE or ports in Oman.The commerce secretary acknowledged the considerations and guaranteed stakeholders that the feasibility of shifting consignments to Chabahar can be examined. He pressured the need to monitor freight and insurance coverage charges intently and discover all potential options as the scenario evolves.