The recent disruptions in the Red Sea transit routes have sparked concerns among exporters in Madhya Pradesh, as increased transit time and high freight charges threaten their ability to meet deadlines. Various sectors in the state, particularly food products, pharmaceuticals, and engineering goods, have been severely affected by the disruptions, causing significant setbacks for exporters.
RS Goswami, President of the Federation of Madhya Pradesh Chambers of Commerce and Industry, highlighted the challenges faced by exporters, noting that shipping costs to the United States have more than tripled from $2,000 to $6,000 per container. This surge in costs has eroded profit margins and made it difficult for exporters to compete in the global market.
The pharmaceutical industry in Madhya Pradesh, which contributes significantly to the state’s exports, has also felt the impact of the disruptions. With transit times to the United States increasing from 25 days to 2 months, exporters are struggling to maintain their competitiveness and meet delivery deadlines.
Amit Chwala, an exporter from Indore, emphasised the detrimental effects of the disruptions on the industry, noting that longer transit times and higher shipping costs have squeezed profit margins and hindered the growth of the pharmaceutical sector.
According to the Directorate General of Foreign Trade, Madhya Pradesh’s pharmaceutical exports stood at Rs 9,737 crore from April 2023 to January 2024, underscoring the significance of the industry to the state’s economy. The overall exports from Madhya Pradesh in the fiscal year 2022-23 amounted to Rs 65,878 crore, positioning the state as the 13th largest exporter in the country.
As exporters continue to grapple with the challenges posed by the Red Sea disruptions, stakeholders are calling for swift resolution to mitigate further losses and ensure the sustainability of Madhya Pradesh’s export industry.
