Due to the ongoing crisis in the Middle East, there has been a huge increase of 60 to 80 percent in the shipping cost (freight) of goods going to Europe. Due to this, exports from Eastern India have declined by 50 percent and hundreds of containers are stuck at Kolkata Port. President of Calcutta Customs House Agents Association, Mannu Chaudhary said that due to ships changing their route to Africa, there has been an increase of 40 percent in the freight.
In addition, the total cost of goods going to Europe and America increased by 80 percent, including additional duties imposed due to the war. He said that shipping companies are now refusing to accept new goods. Because of this, about 600 filled containers, which had come inside Kolkata port to be loaded on the ship, had to be sent back to the city due to lack of space there.
What were the industry’s expectations?
Describing the situation as serious, Rakesh Shah, former chairman of Engineering Export Promotion Council (EEPC) India, said that along with the increase in freight and shortage of containers, the shortage of LPG (LPG) has also affected the production. LPG is used in the process of finalizing engineering goods.
According to Shah, the engineering industry was expected to grow at 3.5 percent this year, but now it is likely to remain at last year’s level. Among the exports from the eastern region, the biggest impact has been on fish, prawns, engineering goods, clothes and medicines.
Announcement of a package of Rs 497 crore
To help exporters, the government has approved a ‘Relief’ (flexibility and freight intervention to facilitate exports) scheme of Rs 497 crore. Under this, help will be provided to compensate for the losses caused by war and additional charges on freight transportation. Micro, Small and Medium Enterprises (MSME) will be able to get up to 50 percent refund on freight and insurance charges, the maximum limit of which has been fixed at Rs 50 lakh per exporter.