Rising freight costs, container shortages, and heavy reliance on major shipping hubs and foreign carriers are posing serious challenges to India’s export industry, according to a report issued by Global Trade Research Initiative (GTRI), on Tuesday, September 17.
It highlighted the need for immediate steps to mitigate these risks, including boosting domestic container production, promoting local shipping firms, and reducing dependence on foreign carriers.
Since 2022, shipping rates for a 40-foot container have remained volatile, stabilizing at around $4,775 in 2024, still significantly higher than the pre-pandemic rate of $1,420 in 2019, GTRI said in the report.
India’s reliance on foreign containers, particularly those from China, further exacerbates the issue. The country produces only 10,000 to 30,000 containers annually, compared to China’s 2.5 million to 3 million, leaving India vulnerable to price fluctuations and supply disruptions, it added.
In addition, over 90 percent of India’s cargo is transported by foreign shipping companies, including giants like Maersk, MSC, and COSCO, leaving Indian exporters at the mercy of foreign control over freight rates and access. Only 5-10 percent of the nation’s trade is handled by Indian firms like the Shipping Corporation of India.
GTRI noted that delays at foreign ports like Singapore are further driving up costs for Indian exporters. If the US-China trade war intensifies, India’s exports may face further disruption, GTRI said.
Without decisive action, India’s export sector will continue to face steep freight rates and logistical hurdles, which could significantly impact its economic growth and trade prospects in the coming years, it added.