Sunil Barthwal, Secretary to the Department of Commerce
| Photo Credit:
PTI
The Commerce Department discussed the impact of the ongoing Israel-Iran conflict on India’s trade and freight rate movements with stakeholders, including shipping and air-cargo sectors, on Friday, sources said.
The meeting, chaired by Commerce Secretary Sunil Barthwal, highlighted the need to closely monitor both freight and insurance rates so that corrective action may be taken if required.
“The Commerce Secretary held a meeting with stakeholders and departments concerned to discuss the impact of Iran-Israel conflict on India’s trade and the actions needed to normalise it. The participants informed that the situation in the Strait of Hormuz is currently stable. Moreover, ship reporting system is in place to monitor any incidents. The freight and insurance rates are also being closely monitored,” a Commerce Department official told businessline.
Strait of Hormuz
There is a growing concern on the possibility of Iran closing the Strait of Hormuz, which accounts for a big proportion of global oil cargo movement, including to India. Indian exporters are also apprehensive about risks resurfacing in the Red Sea route, that was till recently under attack from the Yemen-based Houthis.
“The Commerce Secretary emphasised the need to assess the evolving situation and its impact on Indian export-import trade. He highlighted the importance of exploring all possible alternatives in response to the situation,” the source said.
When the Houthis had started attacking cargo ships in the Red Sea route in response to Israel’s attack on Gaza, Indian exporters had to send its shipments to Europe and parts of America and Africa through the Cape of Good Hope in South Africa. The route was much longer, so the time taken to send shipments and freight rates had increased substantially.
West Africa as an alternative
Indian refiners are considering West African nations and other alternative energy sources to secure additional fuel supplies, should Iran attempt to block the Strait of Hormuz — a critical choke point for global oil and gas transit — as its conflict with Israel intensifies.
In case the Strait of Hormuz is blocked, India may need to tap alternative suppliers from regions such as West Africa, and discussions are already taking place amongst the government and the industry on various possible scenarios, another source said.
About 40 per cent of India’s total crude oil imports, mostly from Iraq, Saudi Arabia, Kuwait and the UAE, pass through the Strait of Hormuz, according to industry estimates. About 60 per cent of the country’s import of LNG also passes through the strait.
Published on June 20, 2025