New Delhi, April 2 The government has implemented a series of measures to protect exporters from the impact of the conflict in the Gulf region, a key market for India's exports, including gems and jewellery, rice, and pharmaceuticals, which were valued at approximately USD 57 billion in 2024-25, a senior official said on Thursday.
During an inter-ministerial briefing on the fallout of developments in West Asia, Director General of Foreign Trade (DGFT) Lav Aggarwal said that the commerce ministry is working with insurers and banks to address issues related to war risk insurance and trade finance.
The ministry is regularly holding meetings with exporters to understand evolving challenges and develop solutions, he told reporters here.
He said that the conflict poses challenges for exporters to ship goods to the Gulf region, with which India had a bilateral trade of USD 178 billion in 2024-25 (USD 56.87 billion in exports and USD 121.67 billion in imports).
The major sectors facing stress include petroleum products, chemicals and plastics, engineering goods, rice, pharmaceuticals, and gems and jewellery.
The six countries in this region are the UAE, Saudi Arabia, Oman, Bahrain, Qatar, and Kuwait.
The region is the largest destination for Basmati rice, marine products, and fresh produce, he added, noting that air and sea freight costs have surged for fresh fruits and vegetables in transit.
He also mentioned that payment channels to key markets could be affected, which could also impact credit cycles for food and agricultural sector goods.
For gems and jewellery, the Gulf Cooperation Council (GCC) is both a major export market and a sourcing hub.
Exports of gold jewellery are under stress, while sourcing of gold bars and rough diamonds from the GCC is also facing disruptions.
The DGFT presentation showed that disruptions in LPG supply to manufacturing clusters are affecting metal melting and gemstone processing.
Vessel rerouting is adding to transportation costs, and shipping lines have imposed war risk surcharges, which are hurting engineering exports to this region.
LPG and PNG supplies are also under stress for foundry, forging, and machining units, while aluminium supply has also been disrupted, with key Gulf ports restricting access to engineering goods.
Similarly, critical pharmaceutical inputs are facing disruptions, and micro, small, and medium enterprises (MSMEs) are facing a shortage of raw materials.
Furthermore, shipments to the US and Europe are taking longer routes due to vessel rerouting, leading to higher transportation costs for exporters.
Aggarwal said that the commerce ministry has set up an inter-ministerial group on March 2 to assess and coordinate the trade impact of the ongoing West Asia conflict, to support the exporting community.
So far, the group has held 20 meetings, he said, adding that a focused sub-group has been constituted specifically for facilitating the movement of perishable cargo from India to the affected region.
"The group continues to monitor the evolving situation and ensure effective inter-ministerial coordination to support trade," he said.