US-Iran ceasefire, Hormuz reopening to ease shipping disruptions: FIEO

New Delhi: The announcement of a ceasefire, between the US and Iran, along with the reopening of the Strait of Hormuz, will provide immediate relief to exporters by easing shipping disruptions, FIEO said on Wednesday.

US President Donald Trump announced a two-week suspension of military strikes against Iran.

Iran agreed to allow safe navigation through the Strait of Hormuz during the ceasefire, triggering sweeping market moves across oil, equities and currencies.

"The ceasefire and reopening of the Strait of Hormuz bring immediate relief to exporters by easing shipping disruptions, high freight rates, and insurance costs," Federation of Indian Export Organisations (FIEO) President SC Ralhan said.

He said while this should help normalise logistics in the short term, exporters will remain cautious given the temporary nature of the truce.

"Sustained stability is essential for restoring confidence and ensuring smooth trade flows," Ralhan added.

The ceasefire announcement is important as the middle east region is a key export destination for Indian exporters.

The conflict has posed challenges for exporters to ship goods to the Gulf region, with which India had a bilateral trade of USD 178 billion in 2024-25 (USD 56.87 billion exports and USD 121.67 billion imports).

The joint attack launched by the US and Israel on Iran on February 28 has severely disrupted the movement of ships in international waters.

Air freight rates too have jumped manifold. The war has also led to an increase in insurance premiums, impacting the profit margins of exporters.

Besides, the closure of the Strait of Hormuz by Iran, through which about one-fifth of global oil and gas supplies pass, has led to shortages of oil and gas in several parts of the world, including Asia.

The government has rolled out a host of measures to cushion exporters from the impact of the conflict in the Gulf region, a key market for India's exports such as gems and jewellery, rice and pharma, which were valued at about USD 57 billion in 2024-25.

The major sectors which are under stress include petroleum products, chemicals and plastics, engineering goods, rice, pharma and gems and jewellery.

The six countries in this region are the UAE, Saudi Arabia, Oman, Bahrain, Qatar and Kuwait.

The region is the largest agri-export destination for Basmati, Marine Products and fresh produce, he said adding air and sea freight costs surged for fresh fruits and vegetables in transit.