The relentless attacks by Yemeni Houthi militia on ships in the Red Sea have caused a significant surge in the cost of Indian exports, more than doubling expenses, according to industry officials. Approximately 80% of India's goods trade with Europe, valued at nearly $14 billion monthly, typically traverses the Red Sea. However, due to Houthi attacks starting in November, exporters noted a rerouting of 95% of vessels around the Cape of Good Hope, adding 4,000 to 6,000 nautical miles and 14-20 days to journeys from India.

Major shipping lines, including Maersk, MSC, and Hapag Lloyd, have halted or temporarily suspended operations in the Red Sea, exacerbating the situation. Shipping container costs from India to Europe, the eastern U.S., and the UK have soared from $600 to $1,500 due to these disruptions, erasing profit margins for exporters. Arun Kumar Garodia, Chairman of the Engineering Export Promotion Council of India (EEPC), estimated a significant impact on exports, projecting losses of at least $10 billion in the fiscal year ending March 2024. With shipping companies considering additional freight cost hikes, exporters also face delays, impacting about a quarter of this month's exports.