Looking to secure crucial energy supplies amidst the Middle East crisis and US-Iran war, India is readying a plan to get ships safely through the Strait of Hormuz. India is preparing a contingency plan to evacuate its ships currently stuck in the Persian Gulf, aiming to secure supplies of around roughly three days of the country’s total demand for crude oil, natural gas, and cooking fuel. The plan may involve deploying naval escorts to guide vessels through the Strait of Hormuz. At the same time, discussions are in progress to facilitate the movement of two container ships stranded in the region that are awaiting transit through the same route, according to an ET report. Altogether, 22 vessels, including 20 carrying energy cargo and two container ships, have been identified for evacuation to ensure a safe and coordinated withdrawal. India imports a big percentage of its crude oil, LPG, and LNG needs and a substantial portion of that transits through the Strait of Hormuz which is a narrow maritime route, in effect closed since the start of the US-Israel-Iran war.
Ships stranded near Strait of Hormuz – hit on Indian economy
A near-term impact assessment on the Gulf situation noted that efforts are underway to organise naval protection and other safety arrangements to enable these ships to exit the Strait of Hormuz in an orderly manner. The vessels in question are three liquefied natural gas carriers, 10 liquefied petroleum gas carriers, seven crude oil tankers, and two container ships.According to the assessment prepared by the Directorate General of Shipping, prolonged disruptions to maritime activity in the Gulf region could create notable macroeconomic challenges for India. These pressures are expected to stem from higher shipping costs as well as a persistent increase of $3–5 per barrel in crude oil prices.Also Read | Trump sanctions waiver for Iran crude oil: What does it mean for India amid Strait of Hormuz supply disruptions?India’s annual import expenditure is projected to rise by Rs 30,000–50,000 crore, which could expand the quarterly trade deficit by $5–10 billion. As a result, Wholesale Price Index inflation is likely to increase by 0.3 to 0.7 percentage points, while logistics costs across the country may temporarily edge up from the current 13–14 percent to about 14–15 percent of GDP, the ET report said.
The DG Shipping assessment also highlights that shipment delays, pressure on margins, and a spike in container freight rates could drag overall export growth down by 2 to 4 percentage points.In addition, nearly 70,400 TEUs of containers remain stranded at both major ports operated by the central government and non-major ports managed by state authorities. To tackle these challenges, the Centre is considering measures such as the RELIEF (Resilience & Logistics Intervention for Export Facilitation) scheme, along with waivers on port-related charges like ground rent and dwell time.The escalation in West Asia follows a joint Israel-US airstrike that killed Iran’s Supreme Leader Ayatollah Ali Khamenei. In response, Iran has carried out strikes across the region, targeting vessel movement near the Strait of Hormuz.
