Air cargo rates from India to the United States have risen between 200% and 350% since the outbreak of the third Gulf war on February 28, as capacity constraints rather than demand drive pricing, according to industry estimates.

The increase follows a sharp rerouting of cargo flows that previously transited through the Middle East, with India emerging as a key alternative link between Asia and western markets. The shift comes as Gulf aviation hubs face extensive disruption, reducing one of the world’s primary air freight corridors.

Airspace restrictions and infrastructure damage have forced airlines to cancel or reroute commercial flights, tightening available capacity for east-west cargo movement. A narrow corridor via Azerbaijan remains one of the few viable routes, with Russian airspace closed by sanctions to the north and conflict zones limiting access to the south.

Major Gulf hubs have been particularly affected. Dubai International Airport, once the busiest globally for international passengers, was struck by drone attacks early in the conflict and has reopened with flight windows that reduce throughput by an estimated 60 to 70%. Airports in Abu Dhabi operate under similar constraints, while Kuwait and Qatar have also experienced disruption following strikes on energy and industrial infrastructure.

Overall Gulf air cargo capacity has fallen by 79%, forcing shipments onto longer and more costly routes via Istanbul, Singapore or Anchorage. Each diversion increases transit times, fuel consumption and handling costs, contributing to the sharp rise in freight rates.

The disruption is affecting industries reliant on time-sensitive shipments. Pharmaceutical intermediates, particularly active ingredients for generic drugs and temperature-sensitive biologics, face heightened risk due to delays. Electronics components routed through Gulf hubs are experiencing similar bottlenecks.

The air freight crisis compounds a broader collapse in maritime trade, with sea freight through the Strait of Hormuz down by 97%. Alternative sea routes around the Cape of Good Hope add three to four weeks to delivery times, limiting options for high-value or urgent cargo.

Insurance costs have also risen sharply. War risk premiums for flights crossing Gulf airspace have increased to levels that render some routes commercially unviable, further constraining capacity.

The increase in transport costs is expected to feed into consumer prices within four to eight weeks, as existing inventories are replaced with higher-cost shipments.