Indian shipping firms are losing hundreds of thousands of dollars every month as fears of piracy in the Gulf of Aden hold up ships and delay consignments, officials said.

Around 20 foreign ships, including the India-bound MT Stolt Valor, a chemical tanker with 18 Indian crew members, are being held by Somali pirates in the region.

The Japanese-owned merchant vessel was hijacked by Somali pirates in September in the Gulf of Aden.

"The situation is grave and we are concerned about growing piracy as it is hurting trade," said Shashank Kulkarni, secretary general of Indian National Ship Owners Association (INSA) told Reuters from Mumbai.

"The government must act before it becomes too late," he added.

Indian ships are losing $450,000 a month on cost overruns and delays in meeting deadlines, while crew members are reluctant to sail in the Gulf of Aden, one of the world's most important sea trade routes.

Around $100 billion of India's sea trade passes through the Gulf of Aden, Insa said after a series of meetings with government officials since last month.

Last month, India sent a warship to guard its merchant ships from pirates, but the ship had to turn back due to a technical glitch, Insa officials said.

An Indian Navy spokesman said a replacement ship will patrol the area, but ship owners said it was not enough to instill confidence.

Of the 24 Somali incidents recorded from April to June this year, 19 occurred in the Gulf of Aden, where at least eight vessels reported being fired on by pirates with rocket propelled grenade launchers and automatic weapons.

International shipping federation last week urged governments around the world to do more individually and collectively through the United Nations, to counter piracy in the region.-Reuters