India engages in diplomacy with Iran as Red Sea attacks by Houthi group continues

The attacks orchestrated by the Houthis have significantly impacted trade between Asia and Europe, causing disruptions in supply chains.

In response to the attacks on ships in the Red Sea by the Iran-aligned Houthi group in Yemen, India is actively engaging in diplomatic talks with Iran to safeguard its exporters from the resulting trade disruptions. A government source revealed that Indian Foreign Minister Subrahmanyam Jaishankar recently held talks in Iran, addressing the concerning situation in the Red Sea.

The attacks orchestrated by the Houthis have significantly impacted trade between Asia and Europe, causing disruptions in supply chains. The militant group, expressing solidarity with Palestinians in Gaza, has threatened to extend their attacks to include U.S. ships amid the ongoing conflict between Israel and the militant Hamas group.

To address the challenges posed by these attacks, India is implementing a comprehensive approach. The defence ministry has enhanced surveillance in the region, providing protective escorts to Indian container ships. The Indian Navy has also responded to at least two attacks and hijacking attempts on merchant vessels in the Arabian Sea.

In addition to the defence measures, the finance ministry’s banking division is taking steps to facilitate credit access for exporters affected by the disruptions. The goal is to ensure a consistent credit flow to exporters as delayed cargoes and increased transit costs become prevalent due to the attacks in the Red Sea.

The government source, speaking on the condition of anonymity, explained that the aim is to maintain the flow of credit to exporters, given the delays in cargoes and the increased costs of transit.

While trade volumes from major ports have not been significantly affected thus far, ships are being compelled to take longer routes to avoid the targeted attacks. The Red Sea serves as a crucial passage leading to the Suez Canal, a vital artery for approximately 12% of the world’s shipping traffic en route from Asia’s manufacturing hubs to Europe and the east coast of the Americas.

India’s diplomatic negotiations with Iran underscore the importance of international cooperation to mitigate the impact of such attacks on global trade routes. As geopolitical tensions persist in the region, the collaborative efforts between nations become paramount in ensuring the stability of maritime trade.