Chemical tanker of Israel was recently struck by drone of Yemen, while it was passing through the Red Sea trade route
Shipping via Panama Canal recently dropped by 50% due to drought, forcing ships to take longer & costlier Suez Canal route
Over 80% of global goods trade relies on sea transport, critical for developing countries like India
Hence, blockages in Bab-el-Mandeb Strait (Red Sea) and Panama Canal can disrupt major shipping routes
Suez Canal accounts for about 12% of the global trade flow and about 30% of the global container transportation
About 12% of global trade passes through the Red Sea, including 30% of global container traffic
Red Sea connects Indian Ocean to the Suez Canal via Bab el-Mandeb Strait, hence its disruption may raise Indian agricultural product prices by 10-20%, affecting trade
Both the incident led Brent crude price jump to over 5%, fortunately this may have minimal impact on international oil prices
Global shipping firms had imposed war risk surcharges, resulting in increase of 25-30% Indian freight rates to Europe and Africa
Slowing demand from the European Union affects India's labour-intensive sectors like textiles and gems