India must reframe the Red Sea disruption as a long-term commercial risk rather than a security issue, warns the Global Trade Research Initiative, as regional tensions reshape global freight routes and heighten costs for exporters.
India needs to treat Red Sea-linked disruption as a lasting commercial risk rather than a short-lived security shock, according to the Global Trade Research Initiative, which says the crisis has now dragged on for about 1,000 days and is still raising costs for exporters. The think tank argues that New Delhi must bolster domestic shipping capacity, trade finance, naval protection and alternative transport routes if it wants to shield trade from repeated maritime bottlenecks.
The warning comes as regional tensions continue to reshape Asia-Europe and Asia-US East Coast freight patterns. Major carriers have kept much of that traffic away from the Red Sea and Suez Canal, instead sending ships around the Cape of Good Hope, a diversion that adds distance, time and expense. GTRI says Suez Canal traffic remains far below normal levels and that the split between Suez and Cape routings could persist into 2027.
For India, the impact has been especially acute in trade with Europe, the UK, North Africa and the eastern United States. GTRI says around four-fifths of India-Europe merchandise trade typically uses the Red Sea corridor, while those markets account for roughly half of India’s exports and about 30% of imports. The group says freight and insurance costs have risen sharply, with the heaviest burden falling on small and medium-sized exporters that cannot easily absorb higher logistics bills.
Ajay Srivastava, the group’s founder, said the crisis has pushed longer voyages, higher inventory costs and delayed payments onto firms that already work on thin margins. He said exporters of garments, engineering goods, chemicals, leather, carpets, rice, spices, grapes and marine products have been among the hardest hit because their profit buffers are too narrow to cope with large jumps in freight charges.
India has already begun widening its maritime safety net. The Economic Times reported that services to key West Asian routes, including east of Hormuz and the Red Sea, more than doubled between February and May 2026, while the government has also set up an insurance pool and extended emergency credit support. Separately, the Indian Navy has been escorting vessels in the region through operations aimed at keeping Indian-flagged ships moving safely. Industry reports also say India plans a major investment in new vessels to strengthen supply chains, underlining how the Red Sea crisis has become part of a broader push to harden the country’s trade and energy logistics.
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