Ahmedabad Cover Story
War-risk insurance up 60% as shipping lines divert routes; importers-exporters face longer waits for containers
The Iran-Israel conflict is squeezing Gujarat’s trading community from multiple directions, pushing up freight rates, insurance costs and transit times as shipping lines abandon high-risk routes through the Gulf. Freight rates on select West Asia-linked routes have surged 200-300%, while marine war-risk insurance premiums have risen up to 60% in affected zones. Vessel availability has tightened as carriers divert away from the Strait of Hormuz, leaving importers and exporters facing both longer waits and sharply higher costs.
Shipping lines reroute
Hiren Gandhi, secretary of the InGlobal Business Foundation and an international trade analyst, said the disruption was forcing a fundamental rethink of established shipping corridors. “Major carriers are diverting or suspending transits through the Strait of Hormuz, citing missile risks, vessel seizure threats, and soaring war-risk insurance premiums,” he said.
Gandhi added that the conflict was compounding instability already caused by Houthi attacks on Red Sea shipping. “For India, particularly Gujarat, which relies heavily on Mundra Port, this raises freight volatility, insurance cost spikes, longer transit times, and possible container shortages,” he said.
Dry fruits, energy most exposed
India’s $4.5 billion dry fruit import sector is already feeling the strain, with wholesale prices up 20-30% in recent weeks. The rise is driven by shipping delays and higher risk premiums rather than actual shortages, with Iranian-origin products such as Mamra almonds and pistachios the most exposed. If disruptions persist into May-June, festival-season restocking could trigger a sharper price spike. Energy is the conflict’s biggest pressure point. A significant portion of India’s crude oil and LNG imports transit through or near the Strait of Hormuz, making any sustained disruption a direct threat to the country’s import bill.
Gujarat exporters under pressure
Vinod Agrawal, past president of CII Gujarat Council, said the impact was already being felt across the state. “Freight rates have risen by 200-300%, and insurance charges have increased by up to 60%, including war-risk insurance, affecting both imports and exports from Gujarat and across India,” he said.
According to a CII assessment, export sectors including engineering goods, pharmaceuticals, textiles, and gems and jewellery face the risk of losing competitiveness due to higher logistics costs. Agriculture, manufacturing and financial markets may also experience input cost pressures, supply disruptions, currency volatility and tighter financing conditions.
