NEW DELHI — Critical maritime trade passages are increasingly emerging as strategic and economic chokepoints, creating new risks for global trade flows, according to a report.
An article in India Narrative said Iran has shown how its geographical position around the Strait of Hormuz can be used to influence transit through the narrow waterway, including by charging fees on ships. The report said similar thinking may be emerging in Indonesia, which has signaled it could consider steps to raise revenue from the Strait of Malacca.
The report said major sea trade routes are no longer seen only as safe and neutral passages. Instead, they are increasingly viewed as assets that can be regulated, priced or used as leverage.
For India, the risks are significant. About 50% of India’s crude oil imports and nearly 90% of its LPG and LNG imports pass through the Strait of Hormuz, making it one of the country’s biggest energy vulnerabilities, the report said.
Since the closure of the Strait of Hormuz, India has routed about 70% of its crude imports through longer alternative sea routes, including the Arctic and Baltic routes. That includes West African and Russian crude, though the report said such arrangements would be economically difficult to sustain over the long term.
India also has major exposure to trade linked to the Strait of Malacca. While India’s crude imports are not heavily dependent on Malacca, more than a third of its global trade, especially with Southeast Asia, passes through the strait. The report described Malacca as India’s trade artery and Hormuz as its energy lifeline.
The report said taxes or regulatory controls on transit through major corridors such as Hormuz and Malacca would have systemic economic effects. Higher costs, greater uncertainty and exposure to political decisions outside India’s control could make maritime transit itself a matter of political and economic negotiation.
India has started investing in port infrastructure, expanding domestic refining capacity and building strategic petroleum reserves, all of which could strengthen resilience.
The development of island territories such as the Andaman and Nicobar Islands, along with proposals for a transshipment hub in Great Nicobar, could also give India more strategic options. Their location near the western approaches of Malacca allows for closer monitoring of maritime traffic and strengthens India’s presence in a critical region.
The report said India could reduce exposure to vulnerable chokepoints by sourcing more oil from the West, Russia and Africa, while relying more on overland and multimodal corridors and investing in regional connectivity.
However, it said the most sustainable response would be to reduce the amount of energy that moves through long maritime routes. Expanding transport electrification, renewable energy generation and non-fossil baseload capacity would reduce chokepoint risks while shifting dependence toward domestic capacity.
The report also said stronger buffer mechanisms and strategic reserves would help India manage market volatility, even if they cannot fully offset transit restrictions.
Indonesia’s position on the Strait of Malacca may not lead to immediate policy changes, the report said, but it still adds a new layer of strategic risk. For India, the response will require a broader approach that connects energy planning, maritime strategy, economic policy and geopolitical assessment. (Source: IANS)
