Iran-Israel conflict threatens UP's export-driven industries
What's the story
The ongoing conflict between Iran and Israel, involving the United States, is posing a major threat to Uttar Pradesh's export-driven industries. The leather and footwear industry in Agra and the brass and handicraft industry in Moradabad are among the worst affected. Trade bodies have warned that if the conflict continues and shipping routes remain disrupted, Agra could lose up to 40% of its business this financial year.
Export impact
Agra's leather and footwear exports
Agra's annual footwear and leather product exports are worth around ₹4,000 crore. Of this, trade worth ₹250 crore to ₹500 crore is directly linked to Israel and other Middle Eastern countries. However, exporters say the conflict has increased risks along crucial maritime trade routes such as the Strait of Hormuz and the Red Sea corridor.
Cost implications
Rising freight charges and risks
Sanjeev Singh, an Agra-based leather exporter, told Moneycontrol that shipping companies might divert cargo vessels through longer routes to avoid conflict zones. This could add 30-50 days to delivery schedules and significantly inflate freight charges. Rajendra Kumar Jalan, former chairman of the Council for Leather Exports, was quoted as saying that while immediate impacts are confined to Middle Eastern exports, prolonged conflict could affect pricing and competitiveness due to rising input costs.
Industry vulnerability
Moradabad's brassware and handicrafts exports
Moradabad, known as the brass city, exports brassware and handicrafts worth ₹8,000 crore to ₹9,000 crore annually. Major markets include the US, Japan, and Middle Eastern countries. Exporters estimate that up to 70% of Moradabad's business could be affected due to possible shipping disruptions and order cancellations. Satpal from Handicraft Exporters Association said many exporters have secured orders at international trade fairs, but buyers are taking a wait-and-watch approach amid geopolitical uncertainty.
Export challenges
Urgent need for alternative routes
Vikas Agarwal from the Moradabad SEZ Exporters Association reportedly said that even minor geopolitical disturbances can significantly impact exports. At the same time, Naveed Ur Rehman from the Moradabad Handicrafts Exporters Association was quoted as warning that prolonged conflict could lead to production cuts and job losses for artisans. The outlook for both Agra and Moradabad hinges on how long the conflict lasts and whether maritime trade routes remain operational.