NEW DELHI, India — The Indian government is examining potential support measures for domestic shipping companies and exporters as insurance costs spike due to rising war-risk premiums linked to the ongoing conflict involving Iran and the broader Middle East region, a senior Finance Ministry official said.
The issue surfaced during consultations between Shipping Secretary T.K. Ramachandran and Department of Financial Services Secretary M. Nagaraju with exporters and shipping companies. The discussions focused on assessing how the escalating conflict in West Asia is affecting shipping costs and export logistics.
Industry representatives highlighted a sharp increase in war-risk insurance premiums for vessels traveling through key maritime routes connected to West Asia, including shipping lanes near the Strait of Hormuz. Higher insurance costs, along with the possibility of ships rerouting to avoid conflict zones, are driving up logistics expenses for Indian exporters.
Exporters warned that the rising costs are beginning to erode the global competitiveness of Indian companies. Increased operational expenses can squeeze profit margins and complicate pricing strategies in international markets.
The disruption is particularly concerning for India because nearly half of the country’s crude oil imports, along with significant volumes of liquefied natural gas (LNG) and liquefied petroleum gas (LPG), normally pass through the Strait of Hormuz, a narrow Gulf waterway now effectively closed by the conflict.
Security tensions in the region intensified Wednesday after commercial vessels came under attack in the Strait of Hormuz. The United States said it had destroyed as many as 16 Iranian mine-laying vessels to prevent Tehran from blocking the vital shipping corridor, through which roughly 20 percent of the world’s oil exports move. The move was aimed at stabilizing global oil supplies amid fears of market disruption and rising prices.
Earlier Wednesday, a bulk carrier was struck by an unidentified projectile off the coast of Dubai, bringing the number of reported incidents affecting vessels in the region to 17, according to the United Kingdom Maritime Trade Operations (UKMTO). The crew of the ship was reported safe and evacuated.
The United States has also said its naval forces will provide protection to commercial ships passing through the Strait of Hormuz as tensions continue to escalate in the region. (Source: IANS)
