Vantage | How escalating Red Sea crisis threatens vital Indian trade routes

The Red Sea crisis has taken a dangerous turn putting crucial Indian trade routes at risk. Two Indian commercial vessels have been attacked within two days, both targeted by drones escalating tensions in the region. The United States accuses Iran of orchestrating the attacks, a claim Tehran vehemently denies.

“This past weekend saw four attacks against three separate commercial vessels operating in international waters in the southern Red Sea. We have every reason to believe that these attacks, while they were launched by the Houthis in Yemen, were fully enabled by Iran,” said US national security advisor Jake Sullivan. Iran was quick to refute it. “Yemen has officially declared its position. Its official spokesman of its (Yemen’s) governments repeats their actions daily, really this (Yemen’s move in the Red Sea) is really and completely a Yemeni move in support of Gaza, and this American accusation (about involvement in the recent navy attack) is a baseless accusation against the Islamic Republic,” said Iran’s foreign minister Hossein Amirabdollahian. As the situation unfolds, it poses significant challenges to maritime trade, impacting a sector worth $200 billion. The first attack occurred on the MV Chem Pluto, a vessel transporting chemicals and linked to Israeli shipping tycoon Idan Ofer. The drone strike, launched from Iran according to the US, took place in the Arabian Sea, resulting in a fire but no casualties. The Indian Navy promptly responded, diverting an aircraft and deploying the INS Mormugao, a guided missile destroyer, to ensure the safe passage of the Chem Pluto to Mumbai. The second attack targeted the MV Sai Baba in the Red Sea with 25 Indian crew members onboard. The USS Laboon, a US warship, responded to distress calls preventing casualties but raising concerns about the broader repercussions of the crisis. Geopolitical implications The US-attributed attacks have strained relations between India, Iran and the US. Given India’s historical partnership with Iran and the escalating rivalry between the US and Iran, New Delhi faces a delicate diplomatic balancing act. Tensions are further fuelled by the involvement of Houthi rebels in Yemen, targeting commercial ships and receiving support from Iran. The Red Sea crisis has broader economic implications, especially for India. The Suez Canal, a vital trade route between Asia and Europe, facilitates over $1 trillion worth of goods annually. Approximately 20 per cent of India’s exports pass through the canal with estimates indicating that 65 per cent of India’s crude oil imports in 2023 traversed this route. Increased shipping costs, driven by heightened insurance premiums and longer routes to avoid the Red Sea, are already impacting the industry. Insurance costs have surged by Rs10 to Rs15 lakhs ($12,000 to $18,000) and shipping times have increased by two weeks leading to a 30 to 40 per cent rise in freight costs. The crisis is expected to translate into higher prices for various products including crude oil, palm oil, cereals, machinery, electrical goods, auto components apparel and textiles. Exporters are likely to pass on the additional costs to consumers exacerbating economic challenges. International response In an attempt to secure the Red Sea shipping lanes, Maersk, a major shipping company, has announced its return to the route with the support of the US-led coalition, Operation Prosperity Guardian. However, the Houthi rebels have issued warnings threatening to target American ships adding another layer of complexity to the evolving crisis. “We will not stand idly by if the Americans are tempted to escalate further and commit foolishness by targeting our country or waging war against it. Any American targeting of our country will be targeted by us, and we will make American battleships, interests, and navigation a target for our missiles, drones, and military operations,” said Houthi leader Abdel-Malek Al-Houthi. As the Red Sea crisis unfolds, the interconnected web of geopolitical tensions, economic repercussions and maritime security threats underscores the need for careful diplomatic navigation. The potential for further attacks and the Houthi warning against the US coalition only amplify the urgency of finding a resolution to avoid more significant disruptions in global trade. Views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect Firstpost’s views. Read all the Latest News, Trending News, Cricket News, Bollywood News, India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.