In this edition of the State of the Economy podcast, businessline’s Raja Simhan talks to J Krishnan of S Natesa Iyer Logistics LLP, about the repercussions of recent geopolitical events on global trade.   

The focal point is the diversion of container ships via the Cape of Good Hope, a shift triggered by attacks on container ships orchestrated by Iranian-backed Houthi militants. This strategic rerouting around the southern tip of Africa raises concerns about the pivotal Suez Canal, a crucial maritime route connecting Asia, Europe, and the US.

The podcast begins as Raja touches upon the uncertainties faced by the marine world since the pandemic, citing disruptions such as the Suez Canal blockade, ongoing issues at the Panama Canal, and recent conflicts in the Red Sea.

The conversation delves into the complexities of the crisis, from the origins of the conflict involving Houthi rebels to the economic implications of rerouting container ships. Krishnan’s analysis extends to the potential solutions, including international efforts like Operation Prosperity, which aims to secure safe passage for maritime trade.

The episode sheds light on the practical challenges faced by shippers, increased transit times, rising freight costs, and the domino effect on end customers. Krishnan emphasizes the far-reaching consequences for global trade and, notably, the Indian export sector, where the impact of the Suez disruption is deeply felt.

The podcast concludes with a reflection on the broader implications for maritime trade, the potential shrinkage of capacity, and the necessity for India to bolster its national shipping capacity.  

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(Host: Raja Simhan, Producer: Amitha Rajkumar)

About the State of the Economy podcast

India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups.