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India's food exports to GCC at risk due to Strait of Hormuz closure
India sends more than $5 billion worth of goods to the Gulf region every month; air freight charges have doubled, making exports by air prohibitive
- PUBLISHED: Mon 23 Mar 2026, 7:24 PM
[Editor's Note: Follow Khaleej Times live blog amid US-Israel-Iran war for the latest regional developments.]
Indian exporters are worried if the ongoing regional conflict continues, it could upset their schedules and result in delays in deliveries to the region.
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“I am sure exports from India to the Gulf region would have gone up substantially but for the crisis,” Ajay Sahai, director-general and CEO of the Federation of Indian Export Organisations (FIEO), told Khaleej Times on Monday.
“While smaller Indian vessels have started operating now, taking goods to Khorfakkan from where they are transported by road, the larger ships are not operating. But some Indian and foreign vessels with 1,500 to 2,000 TEUs (20-foot-long containers) are operating now, though the frequency is much lower than earlier,” he said.
Sahai pointed out that fortunately there have been no cancellations of orders placed on Indian exporters, only deferments as of now. “We have seen hits in exports this month, but are hopeful there will be improvements in the coming months,” he assured.
Asked about reports claiming that Iran has started imposing hefty, $200,000 ‘transit fees’ on ships passing through the Strait of Hormuz, Sahai said it would make sense only for vessels with high-value, low-volume goods, not low-value, high-volume ones.
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The Iranian Embassy in India said on Monday the transit fee claims are unfounded and do not reflect the official position of the Iranian government. “In response to certain claims regarding the alleged receipt of a sum of $2 million by the Islamic Republic of Iran from vessels transiting the Strait of Hormuz, it is emphasised that such claims are unfounded. The statements made in this regard merely reflect the personal views of individuals and do not, in any way, represent the official position of the Islamic Republic of Iran,” the Iranian Embassy in Delhi posted on ‘X’ on Monday.
Call for support
Meanwhile, The FIEO has urged Indian banks to provide more cash flow to the Indian export sector, as exporters will face liquidity problems.
Sahai pointed out with the long voyage times, payment schedules have gone haywire and it is necessary for banks to provide some comfort, including moratorium from payment of loans and interests for quarters one and two.
There should also be relaxation on rents by major ports in India, he added.
Exporters have to ensure power to the containers when they are berthed in Indian ports, where plugin charges are extremely high. Air freight charges have also doubled, making exports by air prohibitive.
India exports more than $5 billion worth of goods to the Gulf every month. According to FIEO data, India’s merchandise trade with the region adds up to about $180 billion annually, with exports adding up to over $60 billion and imports of $120 billion.
