India must strengthen shipping capacity, naval protection amid growing chokepoints: GTRI
India must treat maritime insecurity as a long-term trade risk as the Red Sea crisis crosses 1,000 days, GTRI said. Longer shipping routes have raised freight, insurance and working-capital costs, particularly hurting MSME exporters trading with Europe and the US.
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Context
The Global Trade Research Initiative () has highlighted the vulnerability of India's international trade to maritime security threats, particularly the ongoing crisis in the Red Sea caused by Houthi attacks on commercial shipping. The disruption, marking a milestone reported by GTRI on August 15, 2026 (based on the article's timeline)., has forced vessels to reroute around the Cape of Good Hope, leading to significantly higher freight rates, longer transit times, and increased insurance costs, disproportionately impacting MSME exporters. The report emphasizes the need for India to view maritime insecurity as a persistent trade risk and bolster its domestic shipping capacity, naval protection, and alternative transport corridors.
UPSC Perspectives
Economic
The Red Sea crisis underscores the critical importance of secure Sea Lines of Communication (SLOCs) for global and Indian trade. A significant portion of India's trade with Europe, the UK, and the US East Coast passes through this route, which has been disrupted since November 2023., which connects the Indian Ocean to the Mediterranean Sea via the Suez Canal. The rerouting of ships around the Cape of Good Hope has created a supply chain bottleneck, reducing global container capacity and significantly increasing transit times, freight costs, and insurance premiums (specific percentages not cited in source).. This situation severely impacts Micro, Small and Medium Enterprises (MSMEs), which often operate on thin margins and cannot easily absorb the increased costs of freight, insurance, and delayed working capital. The prolonged nature of the disruption highlights the need for India to develop a robust trade resilience strategy, which includes diversifying export markets, enhancing domestic shipping capacity (such as building more indigenous cargo vessels), and developing alternative transport corridors like the . For UPSC, candidates must understand how geopolitical conflicts directly translate into macroeconomic shocks, affecting export competitiveness, current account deficits, and domestic inflation.
Geopolitical
The situation in the Red Sea is a prime example of how regional conflicts can spill over and disrupt global commons. The attacks by Yemen-based Houthi rebels, acting in support of Palestinians amid the Israel-Hamas war, demonstrate the vulnerability of key maritime chokepoints like the and the Suez Canal. The crisis reveals the limitations of purely military solutions; while naval coalitions like can intercept missiles, they have not fully restored commercial confidence. This scenario highlights the interconnectedness of geopolitical theatres, where tensions in West Asia directly threaten vital trade routes linking Asia to Europe. The broader US-Israel-Iran conflict adds another layer of complexity, potentially threatening other chokepoints like the . For UPSC, it is crucial to analyze the strategic importance of these chokepoints, the role of non-state actors in disrupting global trade, and the necessity for India to actively participate in ensuring the freedom of navigation in the Indian Ocean Region (IOR) as a Net Security Provider.
Security & Defense
The GTRI report's call for strengthened naval protection highlights the evolving role of the from traditional coastal defense to safeguarding India's vital economic interests across the high seas. The crisis necessitates a robust naval presence to deter piracy, armed robbery, and targeted attacks on commercial shipping in critical waterways. The has already enhanced its deployments in the Arabian Sea and Gulf of Aden to provide reassurance to merchant shipping. The situation emphasizes the importance of Maritime Domain Awareness (MDA) and intelligence sharing with international partners to preempt threats. Furthermore, the crisis underscores the strategic imperative of securing alternative routes and developing infrastructure that reduces dependence on vulnerable chokepoints. UPSC candidates should evaluate the operational readiness and strategic posture of the in the context of emerging non-traditional security threats, the concept of blue water navy capabilities, and the implications of maritime insecurity on India's comprehensive national power.