Congestion across South Asia's container shipping network is increasing costs and disrupting connections for US-bound cargo, while surging China–India demand and changing Middle East trade flows accelerate India's emergence as a regional transhipment hub.
India's expanding manufacturing economy and the disruption of established Middle East shipping routes are reshaping container movements across the Indian Ocean.
Freight rates from China to India have more than doubled since July, while congestion at Colombo, Nhava Sheva and Mundra is adding uncertainty to regional connections.
For US importers sourcing from India, these developments potentially create upstream cost pressures and increase the importance of reliable feeder services, transhipment connections and inland logistics.
At the same time, India's ports are handling growing volumes of cargo previously routed through Middle Eastern hubs, creating opportunities to strengthen the country's position in international shipping networks.
China–India demand drives freight rates higher
Strong demand for Chinese components, machinery and consumer goods is placing sustained pressure on container capacity into India.
Spot rates on China–India routes have more than doubled since July, with Shanghai–Nhava Sheva rates increasing approximately 20% since late August and Shanghai–Chennai rising around 25%.
The increases reflect growing import demand alongside the redeployment of vessels to higher-yielding east–west trades.
China remains India's largest trading partner, with Indian imports increasing 16% in the 2025–26 financial year. Growth accelerated further during the first five months of the current financial year, with import values rising approximately 27%.
Much of this demand comes from Indian manufacturers importing intermediate components, electronics and capital equipment to support domestic production.
Seasonal consumer demand and advance purchasing ahead of regulatory changes have added further pressure.
The cost increases extend across the wider intra-Asia market. Drewry's Intra-Asia Container Index remained 209% above year-earlier levels in early October, despite easing 1% during China's Golden Week holiday. Six consecutive weekly increases before the holiday underline the sustained cost pressure facing regional supply chains.
Carriers are responding with additional intra-Asia services, but expanding coverage has yet to offset the combined impact of demand and constrained vessel space.
Colombo congestion threatens India–US connections
Sri Lanka's Colombo port has become an increasingly important transhipment hub as shipping lines divert cargo away from traditional Middle Eastern gateways.
The additional traffic is placing considerable pressure on terminal operations. Colombo's transhipment volumes increased 7.8% year on year in August and now account for more than 82% of total port throughput.
Terminal yard utilisation has exceeded 130%, with vessel delays of two to three days reported and container turnaround times extending beyond six days at some facilities.
For Indian exporters, particularly those shipping through southern gateways such as Chennai, Tuticorin and Cochin, the consequences extend beyond port delays.
Securing space on a mainline vessel does not guarantee that cargo will make its intended sailing. Feeder schedules, container availability, transhipment dwell times and mainline port calls must all align. When vessels omit Colombo to recover schedules, containers can miss connections even when space remains available on the onward service.
For US-bound cargo, these missed connections can extend transit times, increase storage and handling costs, and disrupt delivery schedules.
Pressure is also evident at other regional transhipment hubs. While freight rates from China to several Asian destinations eased during Golden Week, rates to Singapore and Tanjung Pelepas increased 2%, reflecting uneven conditions across regional shipping corridors.
Congestion at India's Nhava Sheva and Mundra ports adds another layer of uncertainty, making coordination across the complete transport chain increasingly important.
India emerges as an alternative regional hub
While congestion is creating immediate operational challenges, changing shipping patterns are also opening longer-term opportunities for Indian ports.
Middle East disruption has encouraged carriers to use India's west coast terminals to relay cargo previously handled through established Gulf hubs.
The shift now extends beyond Asia–Middle East shipments, with Indian ports increasingly handling Gulf-bound cargo originating in the US, Europe and Africa.
Nhava Sheva has become central to this development. The port handled more than 703,000 TEU of transhipment cargo between March and August, compared with approximately 513,000 TEU during the entire previous financial year.
At Mundra, transhipment volumes increased approximately 18% year on year between April and July.
These increases demonstrate how quickly carriers have adapted their networks, but the additional volumes are also contributing to terminal congestion and inland transport delays.
Both ports are developing additional storage and container-handling infrastructure to accommodate growing demand.
Regional networks are also being reconfigured. Four Asian carriers are removing Singapore calls from their joint China–India service, illustrating how shipping lines are reassessing established port rotations and connections.
Other gateways, including India's Vizhinjam and Sri Lanka's Hambantota, are attracting interest as carriers seek alternative transhipment options.
India's ability to retain this additional business will depend on whether its ports can deliver competitive costs, reliable feeder connections and consistent operational performance once Middle Eastern shipping patterns stabilise.
Connecting India and the USA with greater control
For US importers, the interaction between rising upstream costs, port congestion and changing shipping networks makes supply-chain planning increasingly complex.
China–India transport costs can affect Indian manufacturers before finished goods begin their export journey, while missed transhipment connections introduce further delays and expense.
A shipment's reliability now depends as much on feeder connections, terminal conditions and inland coordination as it does on securing mainline vessel space.
As India becomes an increasingly important sourcing and manufacturing partner for US businesses, effective coordination between origin and destination markets is essential.
Metro India and Metro USA provide connected expertise at both ends of this developing trade corridor, combining local market intelligence, carrier relationships and international freight capabilities to identify practical routing and transport options.
From managing origin arrangements and assessing alternative gateways to coordinating US imports and inland delivery, Metro helps customers maintain visibility and control across the complete supply chain.
Contact Metro UK, India or USA to review your shipping requirements, identify potential cost and transit-time risks, and build more reliable connections between India and the United States.
