Iran-Israel war to burn a hole in your pocket as inflation set to rise: From medicines to electronic items, check list of items likely to get costlier
It is important to note that India imports raw materials linked to the production of several essential goods. The products range from edible oil to medicines and electronic items, and now the cost of all these products could rise.
Iran-Israel war to burn a hole in your pocket as inflation set to rise
New Delhi: Israeli and US forces continue their assault on Iran as US President Trump says the new leadership in Tehran has been targeted. According to the latest reports, the death toll in the country has risen to 787 people. The Israeli army has reportedly intensified the air attacks on Lebanon and launched a new ground incursion into the country's south, vowing to destroy Hezbollah. It is important to note that if the Iran war continues, inflation across the world could get affected.
India imports raw materials linked to the production of several essential goods. The products range from edible oil to medicines and electronic items, and now the cost of all these could rise. Notably, the price of plastic granules, a byproduct of crude oil, has increased by up to 12 percent in just the last two days.
Here are some of the key details:
- Edible oil prices are also showing a firming trend.
- With no signs of a ceasefire in the Iran war, exporters' concerns are growing.
- Container shipping companies have raised freight charges by up to 150 percent.
- The cost of a 20-ton container, which was around USD 1,100, has now surged to USD 3,500 USD 3,700.
- Container companies are charging such high freight rates in the name of a war surcharge.
- For consignments that are already in transit at sea, shipping companies are pressuring exporters to recall the cargo.
Talking to Dainik Jagran, Pankaj Goyal, Vice President of the Basmati Rice Exporters Association, said that approximately 100,000 to 150,000 tonnes of rice are currently in transit. If they are forced to bring it back, their costs will increase even further.
"We have also met the Director General of Foreign Trade regarding this matter. The situation is similar for other items being exported to Gulf and Central Asian countries as well."
Sanjay Jain, former Chairman of the Confederation of Indian Textile Industries, said that shipments to Europe, the United States, and South America will now have to be routed via the Cape of Good Hope. This will increase the costs by 30 40 percent. Compared to the earlier route, this alternative could take up to 15 additional days for deliveries.
Possibility of a Prolonged War
Traders are of the opinion that India imports a large quantity of raw materials for pharmaceutical manufacturing. The imports of these products will be affected if the war continues for a long time. If import costs rise, items such as mobile phones, televisions, and refrigerators are likely to become more expensive. It is important to note that significant portion of the raw materials used in their production is imported.
Ashwini Kumar, former Chairman of the Federation of Indian Export Organisations (FIEO), said that if the war drags on, exporters' payments could get stuck in various countries. This conflict is set to impact not only India's imports and exports but also the global supply chain.
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