The Iran-backed Houthi militia in Yemen has caused disruptions in global trade flow due to their attacks in the Red Sea. The Suez Canal, used by ships for 12% of global trade, is currently blocked due to hostilities, redirecting ships to pass through Africa. Capital goods and fertilisers are the most impacted sectors, with delays in timely delivery leading to inventory build-up and frozen order conversions. Fertilizers are affected by extended shipment timelines and increased freight costs, as India heavily relies on Middle Eastern countries for fertilizers, particularly Israel and Jordan.
