The ongoing disruptions in the Red Sea have forced Indian exporters to adopt the longer Cape of Good Hope route, leading to a 15-20% increase in transit times and significantly higher freight costs. This shift is particularly challenging for small-scale exporters dealing in low-margin products like textiles and general merchandise for the European market. Trade analysts suggest that while large-scale exporters are absorbing some costs through long-term contracts, MSMEs are struggling with the “landed cost” disadvantage. To counter this, the government is exploring temporary logistical subsidies and fast-tracking Free Trade Agreements (FTAs) to diversify market dependencies.