Amid increasing container freights, Trade Promotion Council of India (TPCI) has said this would push the overall cost of domestic goods in the international markets, which would make it less competitive and hurt the country’s merchandise exports. It said that new records have been hit in container freight spot rates of all carriers and further rise is expected this month.
The council said ‘the industry is worried that if this situation persists, there can be a 5 per cent to 8 per cent increase in the cost of goods from India. This will have an impact on exports too due to equipment shortages or shipments will be postponed due to very high ocean rates. Demand for Indian products will slow down due to high cost’.
Quoting Sandip Patel of SLT Food Inc, and a US based TPCI member, it said that during pre-COVID, cost out of India to North America was on average $1,800 per 20 feet container, which has now touched a high of $6,000 per 20 feet container. Patel added that the problem started when global economies started entering lockdown during the first half of 2020, while China was recovering from it.
Shrikant Devhitka, Export Sales Director at Savion Ceramic (Q-BO) too said that the ocean freight cost also kept on increasing after opening of the market from Mundra port in Gujarat to US, which was between $2,000 and $2,200 six month ago and today it has gone up to $10,000 to $11,000. He said ‘Our orders are getting diverted to Turkey and Spain as they are closer destinations to the export market’.
