Despite the challenges posed by the geopolitical crisis in the Red Sea region, India's overall trade deficit improved by 37.80% from April-February 2022-23 to April-February 2023-24, falling to $72.24 billion. The merchandise trade deficit decreased by 8.43% to $225.20 billion during the same period.

According to the report, this war is causing higher insurance premiums (15–20 percent), delays caused by rerouting (up to 20 days longer), and possible cargo loss from piracy and attacks. Shipping expenses are also expected to grow by 40–60 percent.

In April 2023 the World Trade Organization (WTO) had forecast that merchandise trade volumes would likely grow 1.7% that year. However, disruptions in the Red Sea region coupled with a global economic slowdown will likely lead to a less than 0.8% increase, well short of the WTO's April projection, the organisation’s chief Ngozi Okonjo-Iweala said at the 13th Ministerial Conference (MC13) in Abu Dhabi last week.

Yemen's Houthi militants have once again stirred international tensions by targeting two US warship destroyers in the Red Sea. This recent attack, involving both naval missiles and drones, has escalated concerns over the group's military capabilities and regional stability.

The two sides discussed the regional security situation resulting from the Gaza conflict, including in the Red Sea, the officials noted. 

Shipping vessels are avoiding the Red Sea route for transit between US/Europe and Asia after Yemen-based Houthi militants targeted them in solidarity with the Palestinian state

A joint statement issued late on Friday night said the two leaders called for upholding the freedom of navigation in the Red Sea and underlined the need for respecting the international law of the sea.

The disruption in the Red Sea route, caused by increasing attacks on ships since November 2023, has compelled global shipping lines to opt for longer trade routes, significantly affecting transit times and costs.