PR No – 45
28th February, 2024
New Delhi
India’s exports growth will remain higher despite tussle in Red Sea: PHDCCI
India’s resilience unleashed in the face of Red Sea crisis. India is effectively navigating troubled waters, applying effective mitigating strategies for maintaining the resilience of 50% of its exports, says the industry body PHDCCI
Despite the tussle in Red Sea, India will be able to maintain a positive growth in exports in the current financial year 2023-24, on the back of tussle-mitigating approach and declining global freight costs, said Shri Sanjeev Agrawal, President, PHD Chamber of Commerce and Industry in a press statement issued here today.
Rejuvenating demand scenarios in the advanced economies and a significant decline in container cost will have a positive impact on India’s competitiveness in the global markets, said Mr. Agrawal.
India’s total exports were USD 776 billion in FY 2022-23 with a year on year growth of about 15%; the exports will be higher than the last year’s value, said Shri Sanjeev Agrawal.
The era today is characterized by interconnectedness and global interdependence where the geopolitical landscape significantly influences the economic fortunes of nations, he said.
Despite global challenges, India’s economy remains resilient. India’s geopolitical significance is growing, earning praise from international institutions, said Shri Sanjeev Agrawal.
The Red Sea route through the Suez Canal plays a pivotal role in connecting domestic companies with markets in Europe, North America, North Africa, and parts of the Middle East, said Shri Agrawal.
The Red Sea strait, serving as a linchpin for 30% of global container traffic and 12% of global trade, underscores its importance in the interconnected World of commerce, said Shri Sanjeev Agrawal.
India, heavily reliant on the Red Sea route for its exports, particularly to Europe and the United States, finds itself at a crucial juncture. Approximately 80% of India’s merchandise trade with Europe traverses the Red Sea, making this crisis a cause for concern, said Shri Sanjeev Agrawal.
In the fiscal year 2022-23, approximately half of the country’s exports were routed through the Red Sea. Europe constituted around 22%, North America accounted for 19.5%, North Africa contributed around 2%, and parts of the Middle East constituted around 7% of this trade, said Shri Sanjeev Agrawal.
In the fiscal year 2022-23, about 30% of the country’s imports were facilitated through the Red Sea. Russia constituted around 13%, North America accounted for around 8%, North Africa contributed around 1% and parts of the Middle East represented around 8% of this import trade, said Mr Agrawal.
India may face a sectoral impact on agricultural commodities, marine products, textiles and chemicals, capital goods and petroleum products, said Shri Agrawal.
To effectively address the challenges posed by the Red Sea crisis, India should prioritize diplomatic initiatives, diversify trade routes and transportation options, leverage existing infrastructure such as the Chabahar port, government support including subsidies and invest in technology, he said.
India acknowledges the complexity of the challenges posed by Red Sea crisis but is steadfast in its commitment to navigating these troubled waters by leveraging strengths, exploring alternative routes, and forging new partnerships, said Shri Sanjeev Agrawal.
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Warm Regards,
Media Division
PHD Chamber of Commerce and Industry