An unprecedented spike in container costs by as much as seven times, from around ₹1.5 lakh to ₹11 lakh, is threatening to put a spanner in the works just as global trade is gathering steam. The government has to act immediately before this spike in tariff begins to hurt the economy, according to Karnataka Small Scale Industries’ Association (KASSIA).
In a statement issued in Bengaluru on October 22, the trade body shared the concerns of MSME exporters of Karnataka.
“The government should consider providing a freight subsidy to exporters, and importers too as the latter are unable to pass on the extra cost to their suppliers,” according to KASSIA. “No business can survive when prices rise nearly 10 times. And to add to this sorry state, businesses are also hit by a severe container shortage due to the closure of Chinese ports, or operating at subdued levels. If the government does not intervene, a large number of MSME exporters may be compelled to shut down.”
Pointing out that some countries like the United States of America were responding to the evolving situation by encouraging ports to operate 24/7 to keep businesses afloat, KASSIA has asked the government to respond to the serious concerns which threaten to derail India's exports ahead of the crucial holiday season orders from the West.
