Iran-Israel war: Exporters push for urgent shift to Chabahar port as conflict threatens trade routes - Here's what you need to know

Amid the escalating Iran-Israel conflict , Indian exporters have suggested shifting cargo operations from Iran’s Bandar Abbas port to the India-managed Chabahar port , citing fears of a wider regional disruption that could severely impact trade with Afghanistan, Central Asia, and Russia.

According to the news agency PTI, the recommendation was made during a high-level meeting convened by the commerce ministry on Friday to assess the fallout of the conflict on India’s trade.

Commerce secretary Sunil Barthwal chaired the meeting, which was attended by representatives from the petroleum, shipping, revenue, and financial services departments, as well as shipping lines and airport authorities.

An industry official who attended the meeting was quoted by PTI as saying, “If Bandar Abbas port doesn’t function, it will affect exports not only to Iran but also to Afghanistan and Central Asia. We have been informed that there is adequate capacity at Chabahar, and this needs to be explored urgently.”

While Iran's Bandar Abbas port remains operational, exporters flagged that further escalation of hostilities could block key maritime routes, particularly the Strait of Hormuz , a chokepoint that handles nearly a fifth of the global oil trade. The narrow 21-mile-wide waterway is vital to India, which relies on it for over 80 per cent of its energy imports.

The Federation of Indian Export Organisations (FIEO) confirmed it would soon hold consultations with Chabahar port authorities. “We will enquire about the facilities at the port,” a senior FIEO official said, noting that a final decision would rest with the shipping lines, while DG Shipping would also review the feasibility.

Exporters also raised concerns over a sharp rise in freight charges . Air freight rates have already jumped 15 per cent, while ocean freight to Europe and Mediterranean ports has surged by $1,000 per TEU (twenty-foot equivalent unit).

The cost of transporting a 20-foot container has also gone up by $500–600. Many buyers have paused orders, and exporters are delaying shipments, fearing that goods may get stranded at ports, leading to heavy demurrage charges.

India’s exports to Israel have already declined from $4.5 billion in FY24 to $2.1 billion in FY25, and imports have also dipped. Trade with Iran remains flat at $1.4 billion, but exporters worry the ongoing conflict could further damage these fragile trade ties. Basmati rice exports to Iran have reportedly halted, and shipping to the Middle East has become more expensive.

If access to the Strait of Hormuz is impacted, India may have to consider alternate routes via Fujairah port in the UAE or ports in Oman.

The commerce secretary acknowledged the concerns and assured stakeholders that the feasibility of moving consignments to Chabahar would be examined. He stressed the need to monitor freight and insurance rates closely and explore all possible alternatives as the situation evolves.