India's Red Sea Imperative: Securing Bab el-Mandeb and the Future of Maritime Trade

What is the projected threat to maritime trade?

The analysis of India's imperative is based on a projected crisis scenario for mid-2026, where the Houthi group renews its threat to shipping through the Bab el-Mandeb. In this scenario, a Houthi-declared “maritime embargo” on a regional power like Saudi Arabia, potentially at Iran's behest, would reignite the crisis. The severity of such a threat would be amplified if it coincided with ongoing tensions at the Strait of Hormuz, creating a dual-chokepoint challenge for global trade. The primary concern, as evidenced by the 2023-24 crisis, is the immediate reaction of the global shipping and insurance industry. According to industry reports from that period, the 12 major P&I clubs are highly risk-averse. A renewed threat could again lead them to raise war risk premiums exorbitantly or deny cover altogether, forcing container ships and oil tankers onto the longer, costlier route around Africa's Cape of Good Hope.

Why is the Bab el-Mandeb Strait critical for India?

The Bab el-Mandeb is an indispensable artery for India's economy, serving as the gateway to the Suez Canal for trade with Europe, the Mediterranean, and North America. An analysis by the Takshashila Institution estimates that approximately one-third of India's foreign trade, valued at over $200 billion annually, transits through this region. Any disruption has a multi-pronged impact. First, it directly impedes trade flows. Between November 2023 and March 2024, at least 2,000 ships were forced to bypass the Suez Canal, a diversion that adds 10-14 days and over $1 million in fuel costs per voyage for a large container vessel. This delays critical imports for India's manufacturing sector and makes Indian exports less competitive. Second, it affects India's energy security, as a significant portion of crude oil imports, including discounted Russian oil destined for western Indian ports, uses this route. Third, it impacts the welfare of Indian seafarers, who constitute a large portion of the global maritime workforce.