India’s Shipping Services Double Across Key Sea Shipping Routes

More than 80% of global trade by volume moves by sea. When key sea shipping routes are disrupted, the impact is felt across the supply chains and logistics operations of exporting businesses worldwide. In 2026, both the Red Sea and the Strait of Hormuz faced simultaneous disruptions; the first time such a situation had occurred in modern history.

For Indian exporters, the question is no longer whether global shipping disruptions will affect their business, but how to navigate them. Here is a look at the changes reshaping the global trade network and what they mean for India’s shipping sector and your export business.

What’s Happening in India’s Shipping Sector?

India’s shipping sector is witnessing record growth, but it is also adapting to major global disruptions. The country’s ports handled a record 915 million tonnes of cargo in FY 2025-26. At the Maritime Leaders Conclave, Prime Minister Narendra Modi stated that “the maritime sector is driving India’s growth” and announced plans worth 2.2 lakh crore for shipbuilding and port development. India’s seafarer workforce has also tripled over the past decade, crossing three lakh and placing the country among the world’s top three.

At the same time, tensions in West Asia have disrupted key shipping routes, forcing vessels to take longer, more costly routes. According to Mukesh Mangal, Additional Secretary at the Ministry of Ports, Shipping and Waterways, shipping services to the East of Hormuz and the Red Sea increased from 127 to around 250 between February and May. While these alternatives have helped sustain trade flows, 13 Indian-flagged vessels remain stranded west of Hormuz.

To support the sector, the government has launched the Bharat Maritime Insurance Pool with a guarantee of INR 12,980 crore to cover cargo, vessels and war-related risks. It has also extended assistance through ECLGS 5.0, under which INR 35,194 crore has been sanctioned to exporters affected by rising freight costs.

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How Red Sea Disruptions Are Influencing Shipping Routes?

Red Sea disruptions have forced shipping companies to divert vessels away from the Suez Canal and reroute them around southern Africa via the Cape of Good Hope, increasing transit times and freight costs.

The route through the Red Sea and the Suez Canal carries around 12% of global trade, including 30% of container shipping between Asia and Europe. When this route became unsafe, most shipping companies shifted to the Cape of Good Hope. This alternative route adds roughly 3,500 to 4,000 nautical miles and 10 to 14 extra days to each journey.

For exporters, the impact has been higher costs and longer delivery timelines. Freight rates on Asia-Europe routes are currently running around 25% above normal. Businesses shipping urgent goods have turned to air freight, but air cargo rates on India-Middle East routes have increased by 250% to 300%, with capacity booked weeks in advance at major Indian airports.

Although India’s major ports still handled a record around 915 million tonnes of cargo in FY 2025-26, transportation costs remain elevated. In January 2026, Maersk indicated it would restart Suez Canal services when regional conditions improve. However, ongoing tensions and security risks in the Strait of Hormuz continue to create uncertainty, leaving Indian exporters to manage higher costs and unpredictable delivery schedules.

Why Are Shipping Services Expanding Now?

Shipping services are expanding to support rising export volumes, reduce dependence on foreign carriers, meet growing eCommerce demand and improve resilience against global trade disruptions.

• India pays foreign carriers to move its own trade.

Foreign shipping lines currently carry more than 90% of India’s export and import trade. When global routes are disrupted, Indian exporters absorb the impact through higher freight rates, surcharges and delays.

• Exports are outpacing existing infrastructure.

India’s goods exports increased from USD 437.70 billion to USD 441.78 billion in FY 2025-26, driven by agricultural products, electronics, chemicals and engineering goods. Existing routes and vessel capacity are under pressure as export volumes continue to grow.

• Cross-border eCommerce is creating new demand.

International shipments are the fastest-growing segment of India’s courier and express market, projected to grow from USD 10.58 billion in 2026 to USD 17.5 billion by 2031. As more Indian businesses sell overseas, demand for direct, reliable and affordable shipping routes continues to increase.

• Global disruptions exposed how few alternatives India had.

The simultaneous disruption of the Red Sea and Strait of Hormuz routes highlighted India’s limited routing options during global crises. Expanding shipping services and trade corridors is therefore becoming essential for both growth and supply chain resilience.

What Does This Mean for Indian Exporters?

Indian exporters are facing higher shipping costs and longer delivery timelines as export volumes continue to grow faster than available shipping capacity. The disruptions in the Red Sea and Strait of Hormuz exposed the limited alternatives available when major trade routes are blocked.

To ease the pressure, the government has introduced the RELIEF scheme for insurance support, committed INR 25,060crore towards affordable credit and warehouse infrastructure, and expanded market access through trade agreements with the EU, UK, New Zealand and Oman. The impact will depend on how quickly these measures are implemented.

Key Trade Corridors Benefiting from the Expansion

With key shipping routes under pressure, several trade corridors are opening up as alternatives for Indian exporters.

1. India-Middle East-Europe Economic Corridor (IMEC) 

IMEC spans more than 5,000 kilometres, connecting India with Gulf countries and Europe through a combination of sea and rail networks. Construction of railways, ports and logistics hubs began in April 2025, making it one of India’s most significant trade infrastructure projects.

2. International North-South Transport Corridor (INSTC)

Stretching 7,200 kilometres across Iran and Azerbaijan, the INSTC connects India with Russia by sea, rail and road. It is increasingly being used as a faster and more cost-effective route to Central Asian and Russian markets.

3. Trans-Caspian Middle Corridor 

This corridor links Asia and Europe through Central Asia and the Caspian Sea. Because it bypasses Russia, it has become an important alternative for businesses seeking a more stable and predictable route to Europe.

4. South Asia Subregional Economic Cooperation (SASEC)

Supported by the Asian Development Bank, SASEC is improving road, rail and port connectivity across Bangladesh, Bhutan, India and Nepal, helping reduce transit times and logistics costs within South Asia.

How Sea Shipping Supports India’s Export Growth

Sea shipping is the backbone of India’s export economy, carrying the vast majority of the country’s international trade and enabling access to global markets at scale.

At the CII EXIM Conference 2026 in Kolkata, Minister of State for Ports, Shipping and Waterways Shantanu Thakur stated: “Nearly 95% of India’s trade by volume and around 70% by value is handled through our ports. This clearly shows that the maritime sector is not merely a transport channel; it is a strategic enabler of India’s global trade ambitions.”

India’s port capacity has more than doubled over the past decade. Turnaround times have improved, and greater digitalisation is reducing delays that once held Indian ports below global benchmarks. For exporters, this translates into faster shipments, improved reliability and more predictable logistics costs.

Challenges Exporters Should Still Watch Out For (mention Red Sea-related costs/delays here)

Despite new trade corridors and government support, exporters continue to face challenges from Red Sea-related disruptions. Freight costs remain significantly higher, with rates on routes such as Kolkata-Rotterdam rising from around USD 500 to USD 4,000 per container. Diversions via the Cape of Good Hope add 13 to 18 days to transit times and increase fuel costs, leading to additional surcharges.

Longer shipping schedules are also affecting cash flow, as exporters must wait longer to receive payments after goods are dispatched. The Federation of Indian Export Organisations has warned that prolonged disruptions could put billions of dollars in exports at risk.

Container shortages remain another concern. Empty containers are being redirected to higher-volume trade lanes, making 40ft containers harder to secure for Indian exporters. CRISIL has noted that agricultural and seafood exporters are particularly vulnerable, as perishable goods and thin margins leave little room to absorb rising costs and delays.

How Exporters Can Take Advantage of Expanding Shipping Services?

Exporters can benefit by using new trade corridors, government support schemes and more flexible shipping options. Corridors such as IMEC and INSTC offer alternative routes to the Middle East, Europe and Central Asia and may offer lower costs and shorter transit times than existing routes.

The Jalvahak Cargo Promotion Scheme reimburses up to 35% of operational costs for inland waterway transport, helping reduce logistics expenses. Exporters affected by higher freight costs can also seek support under ECLGS 5.0, under which more than INR 35,000 crore has already been sanctioned.

For smaller exporters, cargo consolidation services allow multiple businesses to share container space, making international shipping more affordable and helping them remain competitive despite rising freight costs.

Conclusion

Global shipping disruptions are likely to remain a recurring challenge rather than a temporary event. For exporters, resilience now depends on having alternative routes, flexible logistics partners and access to the right support schemes. Businesses that diversify their shipping options and adapt early will be better positioned to protect margins, maintain delivery commitments and capture new export opportunities.