Morbi exporters resume Gulf cargo; Varmora gets 20 containers, not 200

Varmora Granito Ltd, a prominent tile maker in Gujarat's Morbi cluster, sent 18 to 20 containers to the UAE and Iraq last week. Some shipping lines have resumed services through the Strait of Hormuz, Varmora said, as the wider situation eased¹. The company needs 150 to 200 containers to meet its orders. It is getting about 20¹.

"Earlier, no containers were available. Now, in place of 200 containers, we have started getting 20," chairman and managing director Bhavesh Varmora told BusinessLine¹.

Morbi's exports are still expected to fall about 40% to roughly ₹12,000 crore in the year to March 2027, from a normal ₹20,000 crore, according to industry estimates cited in the report¹. Between 30% and 40% of the cluster's units are shut, also an industry estimate¹.

Gulf capacity is still thin

Only two containerships sailed into the Gulf in Week 42, down from five the previous week, Drewry said, citing security risks and attacks on ships².

October has been the worst month on record for attacks on commercial shipping in and around the Strait of Hormuz. The Washington Institute for Near East Policy counted 28 confirmed and reported incidents³. It has logged 113 attacks since the US-Israeli war with Iran began on 28 February. Its senior fellow Noam Raydan said Iran is trying to slow the recovery in shipments³.

Gulf ports are strained too. The Journal of Commerce reported longer berthing delays at Fujairah and Khor Fakkan and tight feeder capacity on the India-Middle East trade⁴. Some Morbi exporters are routing Dubai-bound cargo through Oman, BusinessLine reported¹.

Freight is off the peak, but not back to normal

Varmora estimates its rates to Europe and other western markets have fallen to about $6,000-6,500 per container from about $8,000. US rates are about $5,500, down from about $7,500¹. Before the disruption, Europe cost $1,500-2,000 per container, according to Varmora's estimates¹.

His Europe figure is far above the main published benchmark for Asia-Europe spot freight. Drewry put Shanghai to Rotterdam at $3,632 per 40ft container on 22 October, and its composite index at $4,585, up 2% and the highest in 15 weeks^2, 5. Xeneta had Far East to North Europe at $3,698 per FEU on 23 October, up 67% from 28 February⁶.

The two are not directly comparable. The report does not say what box size Varmora's figure covers, or whether surcharges are included¹. Drewry's index tracks China-origin cargo, and India-origin bookings have moved differently. The Journal of Commerce reported on 28 October that India-Europe carrier booking rates had halved from August highs⁷.

On the US lane, Varmora's $5,500 sits below Drewry's Shanghai to Los Angeles rate of $8,007 per 40ft container^1, 2.

Boxes are the other half of the squeeze

Container equipment stays tight in part because many ships still avoid the Red Sea, though transits are rising^8, 9. That detour has removed around 12% of effective fleet capacity, and slow steaming has taken another 2%, according to MPC Container Ships chief executive Constantin Baack⁹. Only 0.6% of the global fleet was idle at the start of 2026⁹.

The Cabinet approved the ₹10,000 crore Container Manufacturing Promotion Scheme on 28 October, aimed at raising India's container output tenfold to 750,000 TEU a year^10, 11.

Power costs and US duties add pressure

Energy is adding to the cluster's costs. Gujarat's peak power demand hit 29,822 MW on 16 October, up 36.6% from a year earlier. The state advised industry to voluntarily avoid electricity use between 5 p.m. and 11 p.m.¹². Industrialists in Morbi said staggered outages would hit smaller MSME units in the hub¹².

K G Kundariya, a veteran ceramic manufacturer and former president of the ceramic association, said: "It is going to be a tough year for the Morbi ceramic industry. Exports for a large number of players in Morbi through Hormuz remain closed. Secondly, due to Houthi activity, trade through the Red Sea remains impacted"¹. He also cited US anti-dumping duties on Indian ceramic products, which the report did not quantify¹.

What to watch

Two things will decide how fast Morbi's export trade recovers: whether carriers keep restoring capacity through Hormuz and the Red Sea, and whether boxes turn up at Indian gateways.

Suez Canal transits are rising, with 55 containerships in the week to 18 October, up 120% from the same week of 2025⁸. Estimates cited in Freightos's weekly update point to a full return in the first quarter of 2027¹³. Jade Pacific Line has started a rotation linking Mundra, Nhava Sheva and Karachi with Egypt's Red Sea coast¹⁴.

The government has extended its RELIEF scheme to 31 March 2027, offering 95% risk cover on ECGC policies for shipments to specified regions¹⁵.