Skip to main content

AFTERMATH OF SUEZ CANAL CRISIS FOR INDIA


The Taiwan-run but Panama flagged MV EVER GIVEN, a 400m long and 59m wide vessel, which was stranded in Egypt’s Suez Canal for six days was finally refloated on Monday. The blockage had already hit world oil markets, with crude oil prices surging 6%, with more than 100 ships stuck on either side. The blockage of the Suez Canal, which connects Asia to Europe, has potentially caused serious consequences on international trade and commerce. Any blockage of the Suez Canal means all ships between Europe and Asia must circumnavigate the Cape of Good Hope in South Africa.

India is the top importer of crude oil and two-thirds of India’s crude oil coming from the gulf regions via the Suez Canal. India may majorly face losses due to its import-export of ethane with the USA and imports of crude oil from Latin America. India stands sixth among exporters of crude oil after countries like Russia, Saudi Arabia, Libya, etc. India’s shipments of oil, textiles, furniture, cotton, auto components, and machine parts to Europe, North America and South America could get delayed by 10-15 days. Sanjay Bhatia, Co-Founder of freight forwarding agency Freightwalla, told Construction World, “While exports won't be affected much in March, the impact may get considerably evident by May-June as we will have to wait and see how shipping lines respond to this challenge. Right now it is a very fluid.. situation, however, the knock-on effects of this could be quite sizable, similar to how we are still dealing with the after-effects of the pandemic lockdowns.”


Even if the already efficient Suez Canal operates at 100% efficiency, the backlog that the vessel has created itself will take a substantial amount of time to clear, and “the domino effect is expected to sustain for the medium term,” Bhatia said. Because of the week-long jam in the canal, an imbalance may be created in the demand-supply chain, escalating freight rates for vessels.


Comments

Post a Comment

Popular posts from this blog

Significance of the “Developed Country” Tag for India

By Xeena Mehta The officials of the United States Trade Representative (USTR) uphold a list of countries that categorises countries as “developing”, “developed”, and “least-developed”. Countries that are classified as “developing” have permissions to export certain goods to the U.S. without being hit by heavy legal tariffs that are bind to be imposed on goods from “developed” countries. The “developing country” tag was originated by U.S. Trade Act of 1974, to aid poor countries develop faster. World Trade Organization also acceded to grant trade benefits to countries that were classified as poor. If noticed we can see that about two-thirds of countries that are members of the WTO classify themselves as “developing” countries and avail fore deals. Any such classification of whether a country is “developing” or not is entirely objective. While the economic progress achieved by India and China have achieved over the last few decades is seen as a valid reason to get rid of their s...
Post a Comment
Read more

Changing Environment For Local Business In Sri Lanka; Government Initiates The Revolution

Local industries and businesses are the backbone of the economy of any country. Additionally, Sri Lankan Government defines a local company as one with a minimum ownership of 51% of a Sri Lankan. To help these companies grow, the Sri Lankan Finance Ministry has proclaimed a circular enlisting the priorities to the local companies. Moreover, this move from the government may bring some salient alterations in the condition of the local manufacturers. The government has also come with up steps that will augment the local industries across the different domains. These domains include IT sector, construction, etc. The circular, as issued by the government includes relevant documentation regarding sourcing of resources and products. Additionally, sources point towards the fact that the government is hoping to extend support to the domestic sector and help them grow. Besides, the major focus is on the three sectors- IT software and hardware, construction and furniture and allied products. Pos...
Post a Comment
Read more

SECOND WAVE OF VIRUS LEFT INDIA’S HOSPITALS IN TROUBLE AS SHOTS RUN LOW.

India is facing a health crisis because of the second wave of the virus which is hitting high records. Hospitals around the country are facing a huge shortage of care beds and intensive drugs. From the wealthiest state Maharashtra to the most populated state Utter Pradesh there has been a shortage of hospital care beds and immunization centers which results in turning away people as they are running out of vaccines.  Maharashtra’s health minister Rajesh Tope has announced a strict weekend lockdown in order to control the situation. Mumbai has currently used up all but 3% of its intensive care hospital beds. Mr. Rajesh Tope has warned the state that they have three days’ worth of shots in stock and vaccination centers across the state are being forced to close down. Chief minister Punjab said that the Punjab’s vaccine will last another five days, urging the government to increase the supply. New Delhi -the capital of the country is also facing a lot of troubles due to the virus. At ...
Post a Comment
Read more