New Delhi is also in talks with Iranian authorities to find a diplomatic solution, officials said.
A high-level inter-ministerial group chaired by the commerce secretary Sunil Barthwal, which has officials from ministries of external affairs, defence, shipping ministry and finance, met Wednesday to take stock of the situation and undertake measures to shield domestic industry and ships from the crisis.
“MEA is negotiating diplomatically with affected countries to find a credible solution soon,” a government official privy to the deliberations told ET.
Another official noted that security protocols had been put in place to secure the troubled route with international collaboration.The official said shipping companies have been directed to notify authorities before they venture towards Europe via the troubled Red Sea route.These protocols have been put in place to ensure safety of Indian seafarers irrespective of the flag on the vessel they are on.At the IMG meeting, defence ministry official said surveillance had been intensified in the Arabian Sea and more mechanisms had been put in place.
“Since the route is jointly secured by Western nations and India, the shipping companies now need to take a call on how much movement they want to undertake on the Red sea,” the official said on condition of anonymity, while adding that even if shipping companies do not notify, the government was closely monitoring all activity on the route.
Focus on credit support
The centre wants to ensure adequate credit flow to exporters as the disruption in the Red Sea region could impact over 80% of the trade with Europe.
“We are monitoring the issue closely and looking at ways things can be improved,” the official, quoted above, said, and added that the department of financial services had been maintaining credit flow to the exporters. The government had already asked the Export Credit Guarantee Corporation (ECGC) to refrain from raising insurance premiums amid rising cost of shipping to Europe. Export consignments have been put on hold due to high freight and surcharges and the sailing of most of the ships have been impacted and generally postponed by 2-3 weeks as the incoming ships, with longer routes, are delayed. Indian shipments of low value products such as agriculture and textiles to Europe are primarily expected to face the impact of disruption in the Red Sea region due to surging freight costs. “What we are gathering is that the volumes from major ports are not impacted. We have asked the shipping ministry to monitor the volumes too. Time and cost will be impacted because instead of going through the Suez Canal, shipments are going through the Cape of Good Hope,” the second official added.
