India is rerouting their exports to the countries of Gulf Cooperation Council (GCC) through Oman, Hatta Border, Dubai and Khor Fakkan port, according to the sources from the Ministry of Commerce. Due to the closure of Strait of Hormuz and other disruptions arising from Iran war, the exports to West Asia from India have been severely impacted. The officials confirmed that India is only exporting essential goods which also include perishable food items to the Middle East countries.
"Food is being mainly exported through Dubai and other essential items are being sent through Dubai and Hatta Border. Nearly 14-15% of the exports from India to the GCC have been impacted,” said an official aware of the matter.
India's exports and imports with West Asian region has gone down by more than 28% in April. This is the second month in a row that the trade with West Asia has fallen as the geopolitical crisis has caused severe disruptions in ship movements and surge in freight rates. In one of the recent media briefings, Commerce Secretary Rajesh Agrawal said that the country's merchandise exports to the West Asian region has come down to $4.16 billion in April this year as against $5.78 billion in April last year.
“Exports of most of the perishable items are being sent through Khor Fakkan port,” said another official.
As per the recent details shared by the Ministry of Commerce, imports from this region has also gone down by 31.64% to $10.47 billion in April, which previously stood at $15.32 billion in the same month a year ago.
India's exports to the UAE and Saudi Arabia have also declined by 36.39 % to $2.18 billion and 2.89 % to $ 852 million in April, respectively. Imports from the UAE dropped 34.63 % to $4.07 billion. However, from Saudi Arabia, it grew 30.29 % to $3.84 billion, and from Oman, it jumped by 246.42 % to $1.48 billion.
Goyal asks Indian industries to find more import substitution
Indian industries need to explore import substitution opportunities and boost local sourcing to strengthen domestic manufacturing, Commerce and industry minister Piyush Goyal said on Monday. Addressing domestic traders, Goyal urged businesses to closely monitor imported goods and identify products that could instead be manufactured locally.
“You should keep an eye on what goods are being imported, because opportunities lie there, as these goods could potentially be manufactured in India,” he said.
He also urged the companies to enhance procurement from domestic firms.
Goyal advised stakeholders to study import patterns to identify sectors where the manufacturing potential can be enhanced for both domestic consumption and exports.
