""When it is disrupted, the impact cascades quickly, from higher fuel costs and inflation to weaker export earnings and pressure on household incomes," said Lekha Chakraborty, senior economist at the National Institute of Public Finance and Policy."
""Operating on margins of just 5% to 8%, they cannot absorb sharp spikes in freight, insurance and delays linked to the Strait of Hormuz [blockade]. Many depend on informal credit that dries up when payments are delayed," Chakraborty explained."
""For exporters, that means business is not stopping, but becoming far less predictable," said Gulshan John, managing director of Nedspice, highlighting the risks to the spice trade due to the current crisis."
The halt of shipping through the Strait of Hormuz is severely affecting India's economy, revealing its dependence on this vital trade route. Approximately 15% of India's exports and 20.1% of its imports are linked to the Middle East. Disruptions lead to increased fuel costs, inflation, and pressure on household incomes. Small and medium-sized enterprises are particularly vulnerable, facing cash flow issues and potential layoffs. The spice trade, crucial for exporters in Kerala, is also experiencing delays and uncertainties due to the crisis.
Read at www.dw.com
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