|
|
|
You can get e-magazine links on WhatsApp. Click here
|
|
|
|
|
|
West Asia conflict & India’s agri exports: Building resilient supply chains in uncertain times
|
|
Saturday, 11 April, 2026, 16 : 00 PM [IST]
|
|
Divya Kumar Gulati
|
India’s agricultural export story has been built on steady demand from West Asia. Over the years, the region has emerged as a dependable market for staples such as basmati rice, spices, fruits, vegetables, dairy, and meat. In 2025, India’s agri exports are estimated at $55 billion, with $11.8 billion flowing to West Asian countries alone. This level of concentration reflects strong trade relationships, but it also exposes a critical vulnerability.
The ongoing conflict in West Asia has begun to test this dependence. Disruptions across key maritime routes such as the Red Sea and the Strait of Hormuz are slowing the movement of goods and increasing the cost of trade. Freight rates have risen, insurance premiums have become more expensive, and shipping timelines have grown uncertain. For exporters handling perishable commodities, these delays are already translating into rejected consignments, falling prices in domestic markets, and pressure on working capital.
With nearly 95% of India’s trade moving by sea, the impact of these disruptions extends beyond logistics. It affects pricing, reliability, and India’s competitiveness in markets that are highly sensitive to cost and delivery timelines. What was once a stable export corridor is now a source of risk, forcing a closer look at how resilient India’s agri supply chains truly are.
Impact on the Fisheries Sector and Marine Exports
The fisheries sector remains one of the most exposed segments within India’s agri export ecosystem, largely due to the perishable nature of its products. In 2025, India exported fresh and frozen meat products, including beef, sheep and goat meat, along with crustaceans, to West Asia valued at approximately $1.81 billion, of which shrimp and prawns accounted for about $220 million. These exports depend on tightly managed cold chain systems, where consistency in temperature and transit time is critical to maintaining quality.
This dependence makes the sector highly sensitive to disruption. Transit delays caused by rerouted shipping, port congestion, and geopolitical uncertainty increase the risk of spoilage. Even slight temperature variations can lead to rejection by importers, resulting in financial losses and strained trade relationships. At the same time, extended transit periods require longer use of refrigerated containers and storage systems, which raises operational costs. Exporters are spending more on fuel, electricity, and monitoring, putting pressure on already tight margins.
The impact extends beyond logistics into demand stability. Uncertain delivery timelines are affecting buyer confidence, with importers delaying or renegotiating orders. This disrupts production cycles, inventory planning, and cash flows. Rising logistics costs, combined with fluctuating demand, are also creating price instability. While some exporters are exploring alternative markets to reduce dependence on West Asia, the transition involves new compliance requirements and building fresh buyer networks, making diversification a gradual and complex process.
Building Resilient Supply Chains
Building resilient supply chains requires a coordinated and multi-layered approach that addresses both structural gaps and immediate risks. Reducing dependence on West Asia is a critical starting point. Expanding into markets such as Africa, Southeast Asia, and Europe can help distribute demand and reduce exposure to regional disruptions. At the same time, strengthening logistics infrastructure is essential. Investments in modern ports, efficient cargo handling, cold chain networks, and multimodal transport can improve delivery timelines and reduce spoilage, especially for perishable goods.
Beyond infrastructure, strategic stockpiling can help manage supply shocks and stabilise prices during disruptions. Maintaining buffer stocks ensures that farmers are protected from distress selling and that supply remains steady in both domestic and export markets. Financial protection also plays a key role. Export insurance, credit guarantees, and risk mitigation tools can safeguard exporters against payment delays, contract cancellations, and currency risks, which are common during geopolitical instability.
There is also a need to move up the value chain. Processed and packaged products offer longer shelf life and better margins, making exports less sensitive to logistics disruptions. At the same time, adopting digital tools such as real-time tracking and demand forecasting can improve visibility and coordination, enabling faster and more informed decision-making across the supply chain.
A Way Forward
The West Asia conflict has exposed a clear structural weakness in India’s agri export model. A large share of exports is concentrated in one region, while the products themselves depend on speed, stability, and predictable logistics. When either of these is disrupted, the impact is immediate. Delays, cost escalation, and demand uncertainty are already visible across categories, with the fisheries sector facing the sharpest strain due to its dependence on cold chain efficiency and tight delivery timelines.
What this moment highlights is not just a temporary disruption, but a deeper need to rethink how India’s agri exports are structured. Growth has been strong, but resilience has not kept pace. As global trade becomes more volatile, the ability to absorb shocks will matter as much as the ability to scale. For India, this means building an export ecosystem that is less exposed to regional risks and better equipped to handle disruptions without passing the burden back to farmers and exporters.
(The author is chairman at CLFMA of India)
|
|
|
|
|
|
|
|
|
|