A group of Indian automakers is halting shipments to the Middle East and North Africa as escalating tensions in the region disrupt global shipping routes. Companies including Tata Motors, Maruti Suzuki, and Hyundai Motor India are deferring dispatches to avoid emergency surcharges and war-risk insurance premiums, according to sources familiar with the matter.

With the Strait of Hormuz effectively blocked, rerouting vessels around South Africa would sharply increase shipping costs. Automakers can typically hold shipments for two to three weeks before storage constraints and working capital pressures mount. The Middle East represents between 8% and 40% of export volumes for major manufacturers, making any prolonged disruption particularly costly.

The conflict has already impacted companies like Bajaj Auto, which has stopped shipments to Gulf countries that account for 3% of its exports. Freight expenses, which typically represent 1% to 3% of revenue for automakers, are expected to climb amid vessel rerouting and higher insurance premiums. The NSE Nifty Auto Index has declined about 3.9% since the conflict began.