Red Sea conflict: Inflation strain on Indian economy looms large

The recent Houthi attacks on the trade line in the Red Sea have invoked several economic concerns regarding the inflation of prices of important goods like grain shipments, petroleum and oil products. With rising surcharge by shipping companies by rerouting of shipping routes. Lt Col(Dr) Satish Dhage has predicted a severe impact of inflation of goods prices on the common man and has predicted security hazards of the nation due to drone warfare.

Aurangabad (Maharashtra): Iranian-backed Houthi group is repeatedly carrying out drone attacks targeting vessels in the Red Sea shipping lane.

They claim their attacks are in support for the Gaza cause. These developments ascertain grave dimensions undoubtedly threatening the availability of critical goods and even India’s energy security.

They endanger half the transit route that carries up to 12 per cent of the global trading vessels. The Houthi attacks have direct repercussions on the Indian economy as the sea trade link - the Suez Canal is impacted by these consternations.

With a rising surcharge by shipping companies over rerouting the shipping route, the vessels are forced to take a longer journey around the cape of Good Hope increasing a distance of 3500 nautical miles.

The rerouting, impacting the travel time of up to two to three weeks will increase fuel costs, decrease shipping effectiveness and raise the prices of the imported goods including the critical shipment of grain from Asia and petroleum and oil products from the East.

According to Lt Col (Dr), Satish Dhage an expert analyst on International Affairs has predicted cost inflation on Indian imports by 85%, primarily on petroleum products imported from abroad. And potential repercussions on the trade of domestic gas, basmati rice, and textile industry.The consequences of which will be faced by the common man.

In response to these attacks, the United States is setting up a Naval task force to shield against the Houthi Rebels in the Red Sea to protect the shipping lines. With a probable chance of drone attacks escalating and penetrating our Indian borders, by our neighbouring countries like Pakistan or other hostile nations towards India. New Drone laws are being proposed, Introducing regulations regarding drone use.

The Armed forces are using drones for enhancing safety, surveillance and target acquisition enhancing the prime requirement for the forces to be up to date with the present technological advancement and warfare. However, drones are also being used by civilians on a large scale.

Lt Col (Dr) Satish Dhage proposed to implement more stringent laws on the use of drones anticipating probable attacks in the future that may put the nation's security at risk.