Red Sea crisis, India's restrictions to cut exports by $5 billion: Report

India's decision to curb export of rice, wheat and sugar coupled with the Red Sea crisis has now put the country's export level in danger. As per The Economic Times, the exports face a shortfall of $4 billion to $5 billion this year.

Red Sea crisis

India, which is the second largest producer of wheat, rice and sugar restricted their export to control the rising domestic prices. The crisis in the Red Sea may strongly affect basmati rice shipment.

Also Read: Crisis in Red Sea: This is why there's a red light for ships in the region now

As per The Economic Times, India may consider an alternate route along Africa for shipments of basmati rice if attacks by Yemen's Houthi group persist, which could lift prices by about 15% to 20%.

However, this alternate route may affect India's export of Basmati rice to Egypt and Europe, according to an official who spoke to The Economic Times.

Meanwhile, an Additional Secretary in the Trade Ministry, Rajesh Agarwal said that India expects growth in exports of other farm commodities to offset the export deficit this year. He further mentioned that exports are growing by over 4% without agricultural commodities that are restricted. He also added that despite the export shortfall, India is likely to meet last year's export levels.

"If we remove agricultural commodities whose exports are controlled, like wheat and rice, exports are growing by over 4%," said Agarwal

"So, despite the shortfall of about $4 billion to $5 billion that we face because of restrictions on sugar, wheat, rice, we should be able to meet last year's export levels," he said.

The data released by state-run trade body APEDA has also mentioned that exports of meat, diary, cereal preparations, fruits and vegetables have risen between April and November.