War May Slow Economy Briefly, India to Support Exporters Including Agri Sector: Piyush Goyal

Mumbai: Union Commerce and Industry Minister Piyush Goyal said the ongoing geopolitical conflict could slow economic activity briefly, but the government will step up support for exporters to reduce disruptions in global trade.

Speaking at a business leaders’ event organized by CNBC-TV18, Goyal said the government is preparing measures to protect shipments affected by disruptions in major shipping routes such as the Red Sea and the Strait of Hormuz.

Government plans insurance support for exporters

Goyal said the Commerce Ministry is working on schemes to provide insurance cover for export cargo that may be damaged, lost or delayed due to geopolitical disruptions.

The government is also engaging directly with exporters to resolve logistics issues.

Officials have launched 24-hour helplines and introduced standard operating procedures (SOPs) to help businesses handle shipping disruptions.

Export promotion councils are also coordinating with authorities to address shipment delays, port congestion and trade logistics challenges.

Shipping disruptions may affect agricultural exports

Market participants said disruptions in maritime routes could affect sectors that depend heavily on sea transport.

India exports a wide range of agricultural commodities through maritime trade, including:

• rice

• sugar

• spices

• oil meals

• marine products

• processed foods

Key export destinations include West Asia, Africa and parts of Europe.

Higher freight costs or longer shipping times could temporarily affect export flows for these commodities.

Rupee pressure linked to global risk sentiment

Goyal also addressed concerns about the weakening rupee.

He said the currency pressure reflects global investor risk aversion during geopolitical uncertainty, rather than domestic economic weakness.

India’s foreign exchange reserves remain strong, covering nearly a year of imports, which provides stability to the economy.

The minister added that the rupee could stabilize once geopolitical tensions ease.

India diversifies energy imports

On energy supplies, Goyal said India currently has adequate crude oil and fuel stocks.

The country has diversified its sourcing of LPG and LNG to reduce dependence on Middle East supplies.

However, shipments from countries such as the United States, Canada and Russia require longer shipping routes. This could raise logistics costs.

Higher transportation costs may indirectly affect agriculture, food processing and supply chains.

India continues to expand global trade agreements

Despite global uncertainty, India will continue expanding international trade partnerships.

Goyal said the country has already signed nine free trade agreements (FTAs) and negotiations are underway with several partners.

Current trade talks involve:

• Israel

• Gulf Cooperation Council (GCC)

• Chile

• Peru

Discussions are also progressing with Mexico and the South African Customs Union.

India is also renegotiating existing FTAs with South Korea and ASEAN to improve market access and trade flows.