Container volume growth likely to moderate by 100-150 bps due to US tariffs: Report

Mumbai, Aug 28 (PTI) Container volume growth this fiscal is estimated to moderate by 100-150 bps due to the impact of the US tariff on sectors like home textiles, gems, shrimp, engineering components, and speciality chemicals, a report said on Thursday.

The volumes are expected to log 8 per cent growth at around 380 million metric tonnes, supported by capacity expansion, rising transhipment activity and slated completion of the entire Western Dedicated Freight Corridor, ratings agency CareEdge said.

Nonetheless, rising insurance costs, shipping rates owing to volatility in the Shanghai Freight Rate Index (SCFI) and transit times are weighing on the sector's growth trajectory, it stated.

"The Indian ports sector continues to navigate a complex global landscape marked by geopolitical conflicts and trade disruptions driven by US tariffs. The United States accounts for only about 5 per cent of India's sea-based trade (excluding electronics)," said Maulesh Desai, Director at CareEdge Ratings.

Consequently, container volume growth in FY26 is estimated to moderate by 100-150 bps due to the impact of the US tariff on export volumes of affected sectors like home textiles, gems, shrimp, engineering components, and speciality chemicals, he added.

Stating that global trade activity gets impacted by geopolitical and trade disruptions, and Indian ports are no exception, CareEdge said that cargo volumes on Gujarat's coast fell 6 per cent in May 2025 due to India-Pakistan tensions.

Additionally, the United States (US) has imposed a 50 per cent tariff on Indian imports, adversely impacting key export sectors. While the US accounts for 20 per cent of India's exports, its share in sea-based trade (excluding electronic items) is barely 5 per cent, implying a moderate direct impact on port volume, it stated.

On July 31, 2025, the US government announced the imposition of a 25 per cent tariff on goods imported from India from August 7 while an additional 25 per cent penalty tariff for engaging in trades with Russia has taken place from Wednesday.

CareEdge Ratings said it expects a significant impact on segments such as home textiles and readymade garments, gems and jewellery, shrimp products, and engineering components and speciality chemicals based on their export exposure to the US and comparative tariff structure with other Asian countries.

India's container cargo had achieved a robust annual growth of 11 per cent in FY25, with handling of 351 MMT of cargo exceeding CareEdge Ratings earlier estimates, it said.

The compounded annual growth rate (CAGR) in the last three years ended FY25 remained healthy at 8 per cent. Buoyant demand, adequate inventory rebuilding amid geopolitical tension and increased cargo containerisation were the prominent factors contributing to the spurt in EXIM trade volumes.

The momentum remained unfazed amid disruption across major sea routes of the Panama Canal and the RedSea crisis, the ratings agency said. PTI IAS MR