Shipping Disruptions From West Asia Conflict Impact Ludhiana Industries

(MENAFN- KNN India) Chandigarh, Mar 9 (KNN) The Ludhiana industrial sector is facing major disruptions as escalating tensions in West Asia affect global shipping routes and trade flows.

Cancelled shipments, higher insurance costs and vessel rerouting through longer routes such as the Cape of Good Hope to avoid high-risk areas including the Red Sea and the Persian Gulf were reported by exporters.

The situation has also affected the Strait of Hormuz, a key passage that carries around 20 per cent of global crude and energy supplies, and logistics hubs such as Jebel Ali Port, a major distribution centre for Indian garments, yarn and auto components.

Upkar Singh Ahuja, President, Chamber of Industrial & Commercial Undertakings (CICU), said the situation is having a 'cascading impact' on India's export-oriented clusters, according to TOI.

Industry Seeks Relief on MSME Payment Rule

CICU has submitted an urgent representation to the Ministry of Finance, Ministry of Commerce and Industry and Ministry of Textiles seeking temporary relief from Section 43B(h) of the Income Tax Act, 1961.

The provision requires companies to pay domestic MSME suppliers within 45 days to claim tax deductions. Industry leaders argue that the rule conflicts with the payment cycle allowed under the Foreign Exchange Management Act, 1999 (FEMA), which permits exporters up to 15 months to realise export proceeds.

Ahuja said shipping delays and extended payment cycles have made the 45-day requirement difficult to meet, creating a liquidity gap for exporters and MSME suppliers.

Textile and Engineering Units Most Affected

The textile and engineering clusters in Punjab, dominated by MSMEs, are particularly vulnerable due to their dependence on predictable shipping schedules and tight margins.

SC Ralhan, President, Federation of Indian Export Organisations (FIEO), said several export orders have been cancelled while logistics costs have risen sharply. He also noted that some exporters travelling in the Middle East for business are currently stranded due to the evolving situation.

Call for Immediate Policy Support

Honey Sethi, General Secretary, CICU, said timely and pragmatic policy support will be critical to ensure that MSME-driven industrial clusters continue operations and protect employment amid the ongoing global disruptions.

(KNN Bureau)

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