Recent events on the global maritime stage have raised significant concerns about potential disruptions to international trade. These incidents include attacks on vessels sailing the Red Sea trade route and an ongoing drought condition affecting the Panama Canal.
This article delves into these issues, exploring their impact, their significance on the global economy, and the measures India can adopt to mitigate vulnerabilities.
Key Issues in the Red Sea Trade Route
The crucial Red Sea route recently encountered a significant issue when the chemical tanker MV Chem Pluto was hit by a suspected drone attack around 200 nautical miles off Gujarat’s coast. Owned by Japan, flagged in Liberia, and operated by the Netherlands, the vessel began its journey from Al Jubail, Saudi Arabia, en route to New Mangalore, India.
The alleged culprit behind this incident is believed to be Houthi rebels based in Yemen, protesting against Israel’s actions in Gaza. The reverberations of this incident extend to Indian oil importers and exporters of essential commodities like tea and basmati, as Red Sea route disruptions could inflate Indian agricultural product prices by 10-20%.
Problematics of the Panama Canal
In another part of the world, the 51-mile stretch of the Panama Canal is experiencing decreased traffic due to severe drought conditions triggered by an El Nino climate pattern. This shortage of water is forcing Asia-US vessels to choose the longer Suez Canal route, adding six extra days to their journey.
As a result, the Panama Canal, connecting the Atlantic and Pacific Oceans, and the Bab-el-Mandeb Strait leading to the Suez Canal, are seeing significant shifts in their traffic.
Significance of Maritime Transport in Global Trade
Maritime transport plays a crucial role in global trade, carrying an incomparable volume (80%) and value (over 70%) of goods worldwide. Despite contributing to around 3% of global greenhouse gas emissions, shipping is relatively more fuel-efficient and emits less per ton of cargo compared to other transport methods like air freight.
Moreover, marine routes serve as lifelines for the transportation of energy resources such as oil and natural gas, demonstrating their unequivocal value in meeting global energy demands.
Countermeasures India can Adopt
To better defend against these issues, India could propose a Joint Maritime Security Initiative involving key Red Sea stakeholders. This initiative could encompass intelligence sharing, coordinated patrols, and joint exercises. Additionally, installing advanced surveillance systems on India’s western coastline could enhance threat detection and response capabilities.
Engagement with Panama Canal authorities could also allow negotiation for preferential passage for Indian vessels or potential toll discounts for specific routes.
Alternate Trade Routes: A Glimpse into the Future
In light of the ongoing issues, renewed interest has surfaced towards the Ben Gurion Canal Project. The scheme proposes a sea-level canal stretching 160 miles, designed to connect the Mediterranean Sea with the Gulf of Aqaba, effectively bypassing the Suez Canal.
If successful, this project could offer respite from the current vulnerabilities in global trade routes, providing a more secure alternative for worldwide shipping.
