Bab El-Mandeb Under Houthi Threat: How Tensions In This Other Key Strait Can Affect Your Grocery Bill

Last Updated:March 31, 2026, 21:15 IST

Already reeling from an energy crisis due to the Strait of Hormuz blockade, global supplies can be adversely impacted by a looming Iran-backed Houthi threat on this vital waterway

Last year in July, a crisis unfolding thousands of kilometres away in the Red Sea drove up prices of essential goods like onions and cooking oil in India.

Already reeling from an energy crisis due to the Strait of Hormuz blockade, global supplies can be adversely impacted by a looming Iran-backed Houthi threat on another vital waterway – the Bab el-Mandeb.

But the effect of such a blockade or attack will be more concentrated, especially for India, for which the Bab el-Mandeb Strait is a key shipping route connecting the Red Sea and the Gulf of Aden and Indian Ocean. Aptly translated from Arabic as the “gate of tears", the strait has historically been a narrow passage of high tensions.

But, now under threat from Houthi rebels in Yemen, it can pose a significant economic and security challenge for India. Since late 2023, the Houthis have targeted commercial shipping in the southern Red Sea and the Bab el-Mandeb as a geopolitical retaliation against Israel’s actions in Gaza. In July 2025, their actions in these waters acutely affected Indian households.

WHY IS THIS STRAIT SO VITAL FOR INDIA?

For India, the Red Sea is not merely a distant waterway. It is the primary maritime “choke-point" for its trade with the West.

The Red Sea-Suez route serves as the artery for 80 percent of India’s merchandise trade with Europe, a volume valued at approximately USD 450 billion annually. At least half of India’s total foreign trade by value flows through this corridor, including essential imports and exports from West Asia, North Africa, and the US East Coast.

Last time, the Houthi threat effectively forced a radical shift in global logistics. To avoid drone and missile strikes, major shipping conglomerates like Maersk, MSC, and Hapag-Lloyd entirely opted to avoid the Suez Canal. Instead, vessels were rerouted around the Cape of Good Hope at the southern tip of Africa.

This time, too, if the situation escalates, the detour will not be a minor adjustment: it adds between 4,000 to 6,000 nautical miles (up to 11,000 km) to the journey. For Indian exporters and importers, this translates into an additional 14 to 20 days of sailing time.

WHAT CAN HAPPEN?

Hurdles in shipping logistics may trigger what analysts call a “trade tax". The extended voyages significantly require more fuel, and the increased danger can lead to the imposition of “war risk surcharges" by insurance providers.

Consequently, freight rates for Indian exporters – particularly those in the textiles, chemicals, and auto parts sectors – will witness massive spikes, making Indian goods considerably less competitive in European markets. The impact on delivery schedules will be equally severe.

For example, a container of sunflower oil from Ukraine, which would normally reach India in 24 days, will take upwards of 35 days with shipping costs rising by 30 to 45 percent.

According to experts, these delays will choke inventories and disrupt the finely tuned “just-in-time" logistics chains that feed India’s manufacturing plants.

HOW WILL IT IMPACT THE INDIAN KITCHEN?

Last year’s crisis in the Red Sea was a stark reminder of how a shipping disruption in West Asia can directly influence a grocery bill in an increasingly globalised India.

This time, too, it will manifest as inflationary pressure on essential goods. These increased costs are rarely absorbed by importers, but passed down the chain from wholesalers to retailers, and finally to the consumer.

Cooking Oils and Food Security

India is heavily dependent on imports for its edible oil, sourcing over 60 percent of its requirements from abroad.

Sunflower oil from Russia and Ukraine must pass through the compromised Red Sea route. Because of the rerouting, the cost per litre last year rose by Rs 8 to Rs 15 with even steeper hikes observed in smaller towns where supply chains are thinner.

Agriculture and Fertilisers

Perhaps more critical for the long-term economy is the impact on fertilisers. India’s agriculture sector depends on imported fertilisers, and the shipping delays and pricing uncertainties may raise the cost of cultivation for farmers across the country.

Any delay in these shipments can lead to reduced crop yields and higher wholesale food prices.

Energy Security

While India sources much of its Gulf oil via the Strait of Hormuz, the Bab el-Mandeb is vital for refined petroleum exports and Russian crude imports coming from the Black Sea.

As of March, global crude prices have hovered near USD 98 to USD 100 per barrel due to these disruptions. Analysts estimate that every USD 10 increase in oil prices can shave 0.1 to 0.2 percent off India’s GDP growth while adding roughly 0.2 percent to retail inflation.

HOW HAS INDIA RESPONDED TO SUCH CRISES IN THE PAST?

In response to the Red Sea crisis last year, the Centre moved beyond diplomatic protests deploying a firm military and economic shield.

The central government had launched the ‘RELIEF Initiative’ to support Indian exporters specifically hit by the West Asia logistics crisis. This initiative provides vital credit buffers and insurance support to help businesses navigate the spike in “war risk" premiums and lost contracts in the European Union.

Simultaneously, the Indian Navy had adopted a proactive role in the region. Multiple naval destroyers, including the INS Kochi and INS Visakhapatnam, were deployed to the Gulf of Aden and Arabian Sea.

News india Bab El-Mandeb Under Houthi Threat: How Tensions In This Other Key Strait Can Affect Your Grocery Bill

Read More