What impact does the Red Sea crisis have on India's trade and the global economy?

In this episode of the State of the Economy Podcast, Amiti Sen speaks with Ajay Srivastava, former Indian Trade Service officer and co-founder of the Global Trade Research Initiative, to learn more about the escalating Red Sea crisis and its impact on India and the world.

Since November 2023, Houthi militias from Yemen have been attacking cargo ships in the Red Sea and expressing their solidarity with the Palestinians in Gaza.

As tensions rise, 95% of ships have flown around the Cape of Good Hope, adding 4,000 to 5,000 nautical miles and 15 to 20 days to travel time. The impact is far-reaching, affecting freight costs, delayed deliveries and potentially disruptions to global supply chains.

The sectors most affected include refined petroleum, chemicals, plastics and basmati rice. The diversion affects 20-25% of India's total goods trade, particularly cargo to Europe, the US East Coast, North Africa and Russia.

The podcast explores the complexities and uncertainties surrounding crude oil imports, focusing on potential impacts on prices and alternatives.

The podcast ends with a powerful reminder of the uncertainties surrounding the Red Sea crisis. Will tensions escalate or de-escalate? Stay tuned for further developments.

Host: Amiti Sen, Producer: Siddharth Mathew.

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About the State of the Economy podcast

India's economy has been hailed as a bright spot amid the general gloom that appears to have gripped the rest of the world. But some sectors continue to sputter while others appear to be running at full speed. To help you better understand the country's contradictions, businessline offers you podcasts with experts from finance and marketing to technology and start-ups