Gulf tensions disrupt trade routes, FIEO warns of rising costs and delays

February 28, 2026

Ludhiana: Reacting to the recent escalation of tensions in the Gulf region, the Federation of Indian Export Organisations (FIEO) has cautioned that the ongoing conflict is beginning to disrupt established global logistics channels, posing fresh challenges for exporters.

SC Ralhan, President, FIEO said that air routes are being altered while maritime trade through the Red Sea and key Gulf straits faces growing uncertainty.

“If diversions become prolonged, shipments may increasingly have to reroute via the Cape of Good Hope, adding an estimated 15–20 days to transit time for Europe and the United States,” said Ralhan while adding that this will inevitably raise freight costs and stretch supply chains.

FIEO further observed that heightened geopolitical risk typically results in higher marine insurance premiums, further adding to transaction costs for exporters.

A prolonged disruption could also exert upward pressure on global energy prices, with consequential implications for input costs and currency stability, including pressure on the Indian Rupee, observed FIEO.

While Indian exporters have demonstrated resilience in navigating past disruptions, sustained instability in these critical trade corridors would warrant close monitoring and calibrated policy support to maintain competitiveness, said FIEO chief.