Crude oil price volatility can influence both inflation and logistics costs

PTI New Delhi

The ongoing conflict between Iran and Israel may have a short-term impact on demand and logistics, particularly in the Gulf region, which serves as a crucial hub for Indian exports, the Federation of Indian Export Organisations (FIEO) said on Monday. FIEO said that the conflict may also lead to increased shipping costs, longer transit times, and hike in marine insurance premiums. The Israel-Iran conflict has escalated significantly in recent weeks.

"We do anticipate some short-term impact on demand and logistics, particularly in the Gulf region, which serves as a crucial hub for Indian exports. Increased shipping costs, longer transit times, and rising marine insurance premiums may add pressure, especially in price -sensitive sectors," FIEO President SC Ralhan said.

He said that crude oil price volatility can influence both inflation and logistics costs.But India's diversified energy procurement strategy and the Reserve Bank's proactive stance help maintain liquidity and macroeconomic stability, Ralhan added.

"Overall, while there are temporary headwinds, we see this as an opportunity for Indian exporters to explore alternate routes, strengthen regional partnerships, and consolidate India's role as a reliable trade partner in uncertain times," he said.