Beyond the Container: Rethinking Trade Strategy in a Riskier World
In a small warehouse near Morbi, a ceramic tiles exporter watches his monthly freight bill rise for the third time in two quarters. It’s not the fuel price, nor port congestion. It’s uncertainty, deep and unpredictable, fuelled by geopolitical tensions and shifting global trade currents.
Across India, small and medium exporters in sectors like textiles, engineering goods, chemicals and processed foods are encountering a new set of invisible costs. These are not tied to raw material prices or exchange rates alone, they stem from fragile global logistics.
And increasingly, these costs are rewriting the rules of global trade for Indian businesses.
Exporting Has Never Been Easy – But It’s Getting Harder
For decades, India’s exporters have built a reputation for resilience. From the dusty industrial parks of Ludhiana to the seafood processing units in Kochi, they have navigated infrastructure bottlenecks, regulatory shifts and global downturns.
But something has changed.
Today, a conflict in one part of the world can delay container ships halfway across the globe. Rerouting cargo flights through safer zones can add 10–15% to costs overnight. Insurers, wary of heightened risk, are revising premiums upward. And exporters, particularly those in contract-heavy industries, find themselves absorbing these increases with little room to negotiate.
The Hidden Weight of Disruption
For many first-generation exporters, logistics was once a predictable variable. Now, it’s a wildcard.
Consider a textile exporter from Tirupur. A sudden increase in sea freight forces him to rethink his pricing with a European buyer, jeopardizing a long-standing relationship. Or a food exporter in Pune, who learns that delays in Gulf-bound shipments could mean spoilage risks he hadn’t budgeted for. These are not isolated stories. They are signs of a broader reality: India’s logistics cost structure is now more vulnerable to external shocks than ever before.
What’s at Stake?
The issue isn’t just cost. It’s competitiveness.
If logistics costs rise faster than those of peer exporting nations, India risks losing market share—especially in price-sensitive regions like Africa, Southeast Asia and the Middle East. For sectors already operating on thin margins, a 15–20% spike in logistics costs can make the difference between scaling up and shutting down.
Moreover, if buyers start viewing India as logistically unreliable, the impact could be reputational, not just financial.
What Can Exporters Do?
While they can’t control geopolitics, Indian exporters can build buffers and adopt smarter practices to stay afloat.
Diversify Freight Routes: Depending solely on traditional sea or air channels is risky. Exporters should explore inland container depots (ICDs), rail-sea combinations, and alternative ports. Flexibility in routing can sometimes be the best protection against delay.
Revisit Contracts and Margins: Fixed-price contracts without escalation clauses can be dangerous in volatile freight markets. Exporters should consider adding cost-sharing clauses, indexing rates, or building in contingency margins.
Form Logistics Collectives; Clusters of exporters can collaborate to negotiate better rates, share warehousing, or even book consolidated cargo. This model has worked in sectors like handicrafts and could benefit other industries, especially in Tier-2 and Tier-3 towns.
Invest in Forecasting Tools: Real-time data on freight trends, shipping disruptions, and port wait times is now accessible. Even basic use of digital tools can help exporters make informed decisions on routing and pricing.
Engage More Actively with Policy Support: Export promotion councils and industry chambers must step up advocacy to ensure the government remains responsive, through freight support schemes, infrastructure investment or bilateral negotiations to ease trade flows.
The Bigger Picture
At the heart of this crisis is a simple truth: in today’s world, logistics is no longer a backend function, it is a strategic lever.
As India aspires to become a global manufacturing hub and reach ambitious export targets, building logistics resilience is not just the government’s responsibility. It must become a core part of business planning, especially for SMEs.
This means treating freight planning with the same seriousness as product design or market development. It means training the next generation of export managers not just in sales, but in supply chain strategy. And it means acknowledging that risk has become a permanent companion to opportunity.
For Indian exporters, the path ahead is not without promise. Global buyers are increasingly looking to diversify sourcing. There is goodwill for India’s products and manufacturing capability. But without reliable, affordable logistics, even the best products struggle to reach their markets on time and at the right price.
So while the next disruption may still be brewing, the time to prepare is now. Because in global trade, resilience is not what you build after the storm, it’s what you build before it.