Red Sea crisis: Significance of India raising issue with Iran which is backing Houthis

Tribune Web Desk

Vibha Sharma

Chandigarh, January 16

Addressing a joint press conference in Tehran with his Iranian counterpart Hossein Amir-Abdollahian on Monday, External Affairs Minister S Jaishankar described the attacks on merchant ships in the Red Sea in the vicinity of India as “a matter of grave concern”.

Such threats directly impact the nation's energy and economic interests, he said, asserting that the issue should be “speedily addressed”.

“We have seen some attacks even in the vicinity of India. This is a matter of great concern to the international community. Obviously, it also has a direct bearing on India’s energy and economic interests. This fraught situation is not to the benefit of any party and this must be clearly recognised,” the EAM said, referring to the recent attacks by Iranian-backed Yemen’s Houthi rebels in the Red Sea.

The seawater inlet of the Indian Ocean between Africa and Asia is a busy trade route with the Suez Canal at its northern end and the Bab el-Mandeb Strait at the southern end leading into the Gulf of Aden.

As many as 20,000 ships pass the Suez Canal every year.

In pure geo-political terms, Jaishankar raising the issue with Iran is an important development given India's “closeness” to the country backing the Houthi rebels.

Impact on India

Experts say the effect of the dangerous situation may not be very visible on Indian trade figures but it will not be long before the impact of the delays, longer routes and withholding of consignments start showing.  

Already, there is a surge in container shipping rates and many exporters are holding back shipments. 

Officials say so far the impact of the crisis on Indian exports and imports has been limited but cumulative effect of higher freight costs, increased insurance premiums, and extended transit times could start showing in the last quarter of the current fiscal year.

Amid attacks and fears of theft and destruction in the zone, exporters, including in India, are holding back shipments, according to reports, while some shipping lines are opting for a longer route via Cape of Good Hope, adding to time and costs that will only be borne by consumers.

According to a think-tank, the country may see around “$30 billion shaved off” its total exports in the current financial year.

The Red Sea strait is crucial for 30% of global container traffic and 12% of global trade.

About 80% of India's merchandise trade with Europe passes through this route.

“Red Sea is an important shipping route for India for goods traded to the US East Coast, Europe, and the Middle East. Commodities like steel, engineering goods, textiles, chemicals, vehicles and agro-products from India pass through the route,” they add.

The Commerce Ministry will hold a high-level inter-ministerial meeting on January 17 with other ministries, including shipping and finance, to discuss the fallout of the attacks.

It has also set up an internal strategic group to discuss global issues impacting the country's trade on a daily basis and prepare a strategy.

“We are closely monitoring the situation,” say officials.

Oil, natural gas, food grain, and various consumer items pass through the waterway en route to the Suez Canal from where around 12% of the world’s trade passes.

India watching closely

The Houthis' attack did not impact India initially but it is now, both directly and indirectly, as per reports.

Rebels may have called it their way of avenging Israel’s offensive in Gaza against Hamas but there have been incidents of attacks on vessels with no clear links to Israel.

After several ships bound for India came under the attack, the Navy stepped up vigilance. The “shift” in maritime incidents closer to the Indian EEZ and increasing attacks on commercial ships transiting the Red Sea, the Gulf of Aden and the Arabian Sea has prompted the Indian Navy to go for “substantially enhanced maritime surveillance efforts” in Central and North Arabian Sea and “augmented force levels”.

The US and the UK have already launched air strikes targeting Houthi positions in Yemen.

Houthis, their cause

Basically, the Houthi movement is a Shia Islamist political and military organisation, emerging from Yemen around the 1990s. Predominantly Zaidi Shias and leadership largely from the Houthi tribe, it came to prominence fighting against Yemen’s Sunni-majority government since 2014.

Following the October violence between Israeli forces and Hamas, the Houthis have been attacking commercial vessels with Israeli links or sailing to Israel, using missiles and drones, and in one case also a helicopter, to disrupt cargo ships in the Red Sea close to the Bab-el-Mandeb strait.

They have vowed to continue attacks until Israel halts the conflict in Gaza.

Multiple shipping lines have suspended operations through the region or are preferring to take a longer journey around Africa due to the deteriorating security situation, according to reports. Many have also declared ‘Force Majeure’ which temporarily relieves them of their normal contractual obligations. 

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