Middle East in 'crisis'! Air cargo and shipping routes halted; government in action, calls emergency meeting

The government has called an urgent meeting with exporters and industry on Monday to assess the rapidly changing geopolitical situation in West Asia and its impact on India, amid a severe disruption to air cargo and container movement, which is impacting trade with the region. 

An official told ET that the Commerce and Industry Ministry will hold a meeting on Monday with officials from other ministries, freight forwarders, the shipping industry, and exporters to assess the impact of current developments on exports, with a particular focus on logistics and the challenges being faced.

The meeting comes at a time when Indian exporters expect Gulf countries to stockpile in the medium term following the US-Israeli joint military operation against Iran and the turmoil in the region targeting several Iranian countries. 

This will increase demand for rice, especially the basmati variety. Exporters of fresh fruits and vegetables said that while shipments to the West have not yet been affected, air cargo is being diverted via South Africa to avoid the West Asian route, which would increase costs.

Insurance premiums may be affected

Higher crude oil prices could also impact the availability of containers and bulk vessels, increasing costs and causing exporters to incur losses on fixed-delivered-price contracts. 

Exporters believe this could also lead to a significant increase in insurance premiums. Another official said that while the impact on ports is minimal so far, they expect some impact on the entire maritime ecosystem in the coming days, especially on the movement of oil carriers and containers.

Iran and India trade

India exported approximately $1.2 billion worth of goods to Iran in 2025, with agricultural products accounting for the majority. 

Rice accounted for approximately $747 million, followed by bananas ($61 million) and tea ($51 million). India also imported goods worth $408.6 million from Iran, including petroleum coke ($135.7 million), apples ($71.5 million), and dates ($33.3 million).

What experts say

TPCI Chairman Mohit Singla stated in a media report that, "We expect rice and tea exports to be impacted in the short term, but within a month, all countries will want to ensure food security. 

We expect demand for rice, especially basmati rice, to increase, and Gulf countries to accumulate large stocks." Singla emphasized the current uncertainty in logistics, which is impacting shipments and is likely to increase transportation costs in the short term.

Kaushal Khakhar, CEO of KB Exports, said in an ET report that the Strait of Hormuz has been closed to maritime traffic, and this will impact Indian fruits and vegetables destined for some Middle Eastern countries. 

However, for now, we believe shipments to Europe and the US will not be affected. Due to the airspace closure, airlines are taking longer routes. However, this reduces the amount of cargo they can carry because they have to carry more fuel.

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Iran-Israel War
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