The consequences of instability in Indo-Pacific waters manifest directly into the Indian economy and the factory floor.

Vaibhav Agrawal is a maritime and logistics legal professional specialising in high-value cross-border shipping, finance, and compliance. His practice covers sanctions compliance, multimodal transport disputes and cargo claims under arbitral frameworks. As a former defence editor, he brings domain insight through his work at the intersection of maritime law, security and aerospace, engaging closely with Indian Armed Forces stakeholders and contributing policy-oriented analysis. He also lectures on maritime law and security, most recently as Guest Faculty at the Indian Maritime University, Chennai.  

The Indo-Pacific Politics talked with Vaibhav Agrawal about the maritime reality of the Indo-Pacific region, the situation in the seas around Taiwan and India’s maritime diplomacy in the Indo-Pacific region.

THE INDO-PACIFIC POLITICS: HOW IS MARITIME TRADE EVOLVING IN THE INDO-PACIFIC IN 2025?

VAIBHAV AGRAWAL: The Indo-Pacific’s maritime trade today is best described as steady but under strain. Growth in container volumes is modest and the optimism of earlier decades has been tempered by an era of constant rerouting and heightened risk management. During one of my interactions with shipping executives in Singapore earlier this year, I heard that entire East Asia–Europe loops have been abandoned because longer transits around the Cape of Good Hope eroded margins beyond recovery. This is not an isolated story to be honest. Rising fuel costs, mounting insurance premiums and more complex scheduling now define trade in these waters. What we are witnessing is a decisive shift away from the orthodoxy of just-in-time logistics toward a resilience-first model.

Companies are deliberately building slack into operations and accepting the cost of larger inventories rather than gambling on precision delivery in an unpredictable security environment. More strikingly, the old separation between commerce and defence has virtually disappeared. I recently spoke with underwriters in London who confessed they evaluate naval escort availability in the same breath as cargo valuation. That simple anecdote tells you how fundamentally the operating assumptions have changed: Shipping in the Indo-Pacific today runs not only on diesel and data, but also on the constant presence of naval power.

“Rising fuel costs, mounting insurance premiums and more complex scheduling now define trade in these waters. What we are witnessing is a decisive shift away from the orthodoxy of just-in-time logistics toward a resilience-first model.”

vAIBHAV aGRAWAL, mARITIME lAWYER

THE INDO-PACIFIC POLITICS: WHAT CHARACTERIZES MARITIME TRADE AROUND TAIWAN?

VAIBHAV AGRAWAL: Taiwan represents the single most sensitive junction in the Indo-Pacific maritime order. It is not just the geography of the strait, which connects Northeast Asia with Southeast Asia and the Pacific, it is the type of cargo rather. Much of what flows here is not bulk commodity but the lifeblood of the digital economy like you have semiconductors, high-precision electronics, advanced machinery etc. I recall one of my colleagues mentioning his experience walking through container yards in Kaohsiung and being struck by the concentration of microchip consignments, shipments that cannot afford even a day’s delay. Yet those shipments now transit through waters bristling with naval patrols, freedom-of-navigation operations and regular aerial overflights.

The militarisation is visible and constant. The irony is that disruption here does not need the spark of outright conflict. The perception of risk itself has become disruptive. A Japanese logistics manager once admitted to me that his firm rerouted vessels further south even before insurers demanded it, simply because corporate boards feared the reputational damage of an incident in contested waters. That is the essence of trade around Taiwan in 2025: it is shaped as much by psychology and risk perception as by material events, with militarisation casting a shadow that already influences global supply chains.

“Taiwan represents the single most sensitive junction in the Indo-Pacific maritime order. It is not just the geography of the strait, which connects Northeast Asia with Southeast Asia and the Pacific, it is the type of cargo rather.”

vAIBHAV aGRAWAL, mARITIME lAWYER

THE INDO-PACIFIC POLITICS: HOW IS INDIA IMPACTED BY WHAT HAPPENS AROUND TAIWAN, THE EAST CHINA SEA, AND THE SOUTH CHINA SEA?

VAIBHAV AGRAWAL: For India, the consequences of instability in these waters are not abstract, they filter directly into the economy and the factory floor. I have seen first-hand how manufacturing units in Mumbai and Bengaluru have stalled production because precision components from East Asia were delayed, stuck on voyages rerouted around contested chokepoints. These are not isolated inconveniences; they alter cost structures and reduce competitiveness across entire sectors. The energy dimension is even more acute. Crude oil and LNG shipments may not originate in Taiwan or the East China Sea, but disruptions in Asian maritime arteries ripple outward, raising freight costs and insurance premiums across the basin. Indian refiners and shippers are now forced to absorb volatility as a permanent feature of business.

Strategically, New Delhi has been compelled to expand its naval deployments, stretching farther east and maintaining visible patrols in the Andaman Sea and even parts of the South China Sea as per several reports in open sources. I witnessed this shift for Manila, where Indian naval presence during a joint sail was discussed in commercial circles with a sense of reassurance. Diplomatically, India is strengthening partnerships with ASEAN navies, expanding cooperation with the Philippines and Vietnam and deepening its alignment with Quad allies. But it is doing so while keeping communication channels with Beijing intact, a delicate act of balance that reflects India’s dual imperative to protect its sea lines while avoiding entrapment in overt confrontation.

“I have seen first-hand how manufacturing units in Mumbai and Bengaluru have stalled production because precision components from East Asia were delayed, stuck on voyages rerouted around contested chokepoints.”

vAIBHAV aGRAWAL, mARITIME lAWYER

THE INDO-PACIFIC POLITICS: WHAT IS INDIA’S MARITIME DIPLOMACY IN THIS CONTEXT?

VAIBHAV AGRAWAL: India’s maritime diplomacy in 2025 is more confident, layered and strategic than in previous years. Through its Act East policy and SAGAR initiative, New Delhi has woven together bilateral naval relations, ASEAN engagement and also the Quad exercises into a coherent web of partnerships. But what I find most impressive is the breadth of its approach. Beyond the visible presence of ships, India has quietly invested in the less dramatic but highly consequential areas of capacity-building: disaster-relief readiness, maritime domain awareness networks, naval training, and port cooperation. In ASEAN meetings, Indian officials are as comfortable discussing hydrographic surveys and coastal radar systems as they are in discussing joint patrols.

This duality builds credibility. It is complemented by India’s careful strategic posture: while expanding visible alignment with the United States, Japan and Australia, New Delhi has been cautious to keep dialogue with China open, ensuring that risk is managed and escalation avoided. When I speak of Manila, the first Indo-Philippine joint sail was not viewed merely as a show of naval presence but as a signal of reliability that India is increasingly seen as a partner who blends resolve with restraint. That balance is exactly why India’s maritime diplomacy now resonates across the region.

“Through its Act East policy and SAGAR initiative, New Delhi has woven together bilateral naval relations, ASEAN engagement and also the Quad exercises into a coherent web of partnerships.”

vAIBHAV aGRAWAL, mARITIME lAWYER

THE INDO-PACIFIC POLITICS: HOW IS MARITIME TRADE INFLUENCING INDO-PACIFIC GEOPOLITICS? ARE THERE UNDER-NOTICED DEVELOPMENTS?

VAIBHAV AGRAWAL: Maritime commerce has become an explicit lever of power in the Indo-Pacific, but what is shaping geopolitics most profoundly are the quiet, incremental changes rather than the headline crises. One such trend, which I often describe as “silent rerouting creep,” is the gradual extension of voyages as ships increasingly avoid contested chokepoints. When I asked a European carrier about their East Asia–Europe routes, they admitted that average journeys are now three to five days longer than they were five years ago. The added costs of fuel, wages, insurance run into billions annually, subtly reshaping trade economics worldwide.

Another under-appreciated development is the rise of grey-market logistics. Sanctioned vessels and clandestine shadow fleets now operate on a scale that rivals national carriers, eroding transparency and creating distortions in global competition. This, in turn, complicates regulatory oversight and creates new vulnerabilities for legitimate operators. Finally, there is the discreet but powerful trend of port and logistics diplomacy. While mega-projects grab headlines, small, almost invisible agreements, bunkering rights, digital logistics services, minor infrastructure upgrades, are locking smaller states into long-term dependencies.

These arrangements often escape scrutiny, yet they are creating strategic linkages that may matter far more over time than any single naval standoff. The geopolitics of the Indo-Pacific is thus being reshaped as much by these invisible structural drifts as by the overt confrontations at sea.

“The most consequential changes are rarely the spectacular crises that dominate the news. It is the slow bleed of longer voyages, higher fuel consumption and rising insurance costs that is rewriting the rules of global commerce.”

vAIBHAV aGRAWAL, mARITIME lAWYER

THE INDO-PACIFIC POLITICS: ANYTHING ELSE FOR READERS?

VAIBHAV AGRAWAL: The critical lesson in 2025 is that trade and strategy in the Indo-Pacific have become two sides of the same coin. Supply chains are not just commercial pipelines; they are strategic lifelines and their fragility is now embedded in the global economy. What I would urge readers to recognize is that the most consequential changes are rarely the spectacular crises that dominate the news. It is the slow bleed of longer voyages, higher fuel consumption and rising insurance costs that is rewriting the rules of global commerce.

In a recent interaction a Colombian port operator told me, “It’s not the one-off disruption that cripples us, it’s the incremental cost that never goes away.” That remark captures reality better than any chart could. The Indo-Pacific’s maritime order is being reshaped gradually, but inexorably, and those who succeed, whether policymakers or corporate leaders, will be those who integrate resilience into their strategic calculus. Efficiency still matters, but preparedness and adaptability are now the true markers of competitiveness in this new maritime age.