Worries for Indian exporters are rising as several containers are stuck in the high seas including Black Sea after the US and European Union imposed sanctions against Russia. A disruption in movement could lead to huge losses.
Sources said that the Indian authorities are looking into the issue. A committee has also been set up to help Indian traders, both exporters as well as importers, to resolve the payment issue and movement of containers.
The Directorate General of Shipping said the committee has been formed “in view of the Russia-Ukraine crisis and the requirement of shipping."
“Several vessels carrying Basmati rice are stuck on Black Sea, we have already taken up the matter with the authorities,” Vinod Kaul, senior executive director, All India Rice Exporters’ Association, told India Narrative.
The Wall Street Journal in a report said that London-based shipping tracker Windward Ltd estimates that 3,500 sailors have been stuck on some 200 ships at Ukrainian ports.
A Bangladeshi cargo ship near the Ukrainian port of Olvia was also struck by a missile. The incident left a crew member dead and several others injured.
According to international law firm Holland & Knight, Russian-related sanctions are already beginning to impact all shipping segments, including commodity traders, tankers, containers, dry bulk and gas. “The market consequences will likely continue to exacerbate supply chain congestion as vessels are diverted or delayed,” it said.
The shortage of containers has also started impacting the Bangladesh economy. “We are worried..if the current situation continues, our economy will be badly affected, especially as Bangladesh and Russia have a very active trade relation,” Ishfaq Ilahi Choudhury, Bangladesh war veteran, who served in the country’s Air Force, told India Narrative.
Bilateral trade between Russia and Bangladesh stood at $1.14 billion in FY21.
The Financial Express (Bangladesh) said that Dhaka could face a series of troubles on both economic and geopolitical fronts. “Economic shock will be felt immediately whereas geo-political difficulty will be visible in the near future. Being globally exposed mostly through trade, the economic shock will be transmitted at a faster rate,” the news organization said.
According to the Bangladesh High Commission in Russia, Dhaka’s main export items to Russia comprised apparel items, jute, frozen foods, tea, leather, home textiles and ceramic products.
As Russian banks and companies have been disconnected from the SWIFT payment system, concerns over payments have also risen.
New Delhi is looking to set up a rupee payment mechanism with Russia.
