Impact of Extended Shipping Routes on Indian Exports and Trade Challenges

Commerce and Industry Minister Piyush Goyal highlighted the negative impact of extended travel times on international trade, particularly Indian exports, as a result of ships using longer routes through the Cape of Good Hope. He expressed concerns about the increased time it now takes for goods to reach foreign markets. Goyal mentioned ongoing discussions with shipping lines, port/terminal operators, and export/import associations to explore potential interventions. Despite these challenges, there have been no reports of container shortages due to extended voyage times or conflicts in the Red Sea and Russia-Ukraine War.

Goyal also addressed the limited demand for Indian-made containers, which has restricted the country’s production capacity. Foreign container manufacturers benefit from economies of scale, leading to lower production costs, advanced technologies, and efficient cargo loading options. This preference for foreign producers has posed a challenge for Indian manufacturers in competing in the container manufacturing sector.

In response to queries in the Lok Sabha, Goyal emphasized the impact of longer ship routes on global trade, including Indian exports. He noted that Container Corporation of India Limited (CONCOR) had ordered 2500 containers from Amba Coach Builders Pvt Ltd in Andhra Pradesh, with 28 containers delivered by November 2021. This indicates efforts to address the container shortage issue and enhance India’s container production capabilities. The minister’s statements underscore the complexities and challenges facing India’s trade and logistics sectors due to prolonged travel times and container supply constraints.

The impact of longer ship routes on global trade, particularly Indian exports, has become a significant concern according to Commerce and Industry Minister Piyush Goyal. As ships take extended routes through the Cape of Good Hope, it results in delays in goods reaching international markets. Goyal highlighted ongoing discussions with various stakeholders to address these challenges and explore potential solutions. Despite these challenges, there have been no reported shortages of containers due to extended voyage times or geopolitical conflicts. The limited demand for Indian-made containers has also restricted the country’s production capacity, with foreign manufacturers benefiting from advantages in production costs and technology. Efforts are being made to address these challenges and enhance India’s container production capabilities, as exemplified by orders placed with a domestic manufacturer.

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