The Federation of Indian Export Organisations (FIEO) has cautioned that the escalating conflict in West Asia may significantly destabilise global logistics channels, increase freight and insurance costs, and place pressure on supply chains and currency stability.
SC Ralhan, President of FIEO, stated that the ongoing conflict is already changing established trade routes. “The ongoing conflict has already begun to disrupt established global logistics channels. Air routes are being altered, and maritime trade through the Red Sea and key Gulf straits faces heightened uncertainty. If diversions become prolonged, shipments may increasingly have to reroute via the Cape of Good Hope, adding an estimated 15-20 days to transit time for Europe and the United States. This will inevitably raise freight costs and stretch supply chains,” he said in an official statement.
FIEO highlighted that rising geopolitical risks could lead to higher insurance and energy costs, further burdening exporters and the Rupee. “In addition, heightened geopolitical risk typically results in higher marine insurance premiums, further adding to transaction costs for exporters. A prolonged disruption could also exert upward pressure on global energy prices, with consequential implications for input costs and currency stability, including pressure on the Rupee,” the organisation observed.
Ralhan emphasised the need for close monitoring and policy support to sustain exporters’ competitiveness amid ongoing instability. “While Indian exporters have demonstrated resilience in navigating past disruptions, sustained instability in these critical trade corridors would warrant close monitoring and calibrated policy support to maintain competitiveness,” he added.
The FIEO’s remarks come amid a sharp escalation of hostilities in West Asia following joint military strikes by Israel and the United States on Iranian sites, provoking retaliatory threats and the closure of airspace over Iran, Israel, and Iraq. These developments have disrupted key international air corridors utilised by airlines operating between India and Gulf nations.
Indian airlines have been compelled to reroute or cancel flights, with airports establishing help desks to assist stranded passengers. Air India and IndiGo have stated they are in close coordination with aviation authorities and are monitoring the situation continuously. They have assured that services will resume once safe flight corridors are established and urged passengers to stay informed through official channels.
Meanwhile, Iran’s Foreign Minister Seyed Abbas Araghchi described the US and Israeli attacks as “unprovoked, illegal and absolutely illegitimate.” He justified Iran’s retaliatory strikes on Israel and US military bases as “an act of self-defence,” claiming this is “absolutely legal and legitimate,” according to Reuters.
“This attack was unprovoked, illegal and absolutely illegitimate and against international law and should be condemned. We are attacking military bases in the region as an act of self-defence. What we are doing is an act of self-defence, which is absolutely legal and legitimate,” Araghchi stated.
Sources familiar with Israel’s military operations, as well as a regional source cited by Reuters, have reported that Iran’s Defence Minister Amir Nasirzadeh and Revolutionary Guards commander Mohammed Pakpour were killed in an Israeli strike. Nasirzadeh had served as Deputy Chief of Staff for the Iranian Armed Forces prior to becoming Defence Minister and began his military career as a fighter pilot. Pakpour took command of the Islamic Revolutionary Guard Corps in 2025 after the previous commander, Hossein Salami, died following Israeli strikes.
Araghchi also alleged that an Israeli airstrike targeted an Iranian primary school for girls, killing dozens. He vowed to respond to the attacks, stating on X, “The destroyed building is a primary school for girls in the south of Iran. It was bombed in broad daylight, when packed with young pupils. Dozens of innocent children have been murdered at this site alone. These crimes against the Iranian People will not go unanswered.”
In response, Iran has targeted Israel and US assets in several Gulf states. Multiple explosions have been heard in Tehran and other locations across the country.
