The ongoing conflict between Iran and Israel, now escalating with U.S. military involvement, is raising serious concerns among Indian exporters and economists about its ripple effect on India’s trade with West Asia. Experts caution that further escalation could severely disrupt trade routes, inflate oil prices, and destabilize economic ties with several nations in the region.
According to trade analysts, the war is already impacting India’s exports to both Iran and Israel. With countries like Iraq, Jordan, Lebanon, Syria, and Yemen in proximity to the conflict zone, the fear of a wider regional spillover is looming large.
Early Sunday, the United States launched airstrikes on three sites in Iran, aligning itself with Israel’s ongoing military operations, reportedly targeting Iran’s nuclear capabilities. Tehran condemned the attack, accusing Washington of sparking “a dangerous war” and warned of a broader conflict.
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“We are in for big trouble now because of this war. It will have a cascading effect on India’s trade with West Asia,” said Sharad Kumar Saraf, founder chairman of Technocraft Industries India. He confirmed that his company has halted consignments to Iran and Israel. Technocraft exports industrial closures and components, and Saraf believes the ongoing conflict will only deepen trade woes.
Exporters also point out that India’s trade had already been suffering due to the Israel-Hamas conflict and Red Sea disruptions caused by Houthi attacks on vessels. As a result, Indian shipping lines had rerouted through the Cape of Good Hope, significantly increasing transit time and costs.
Now, attention is turning to the Strait of Hormuz, a critical waterway for global oil shipments and a vital artery for Indian trade. Disruptions here could hinder the movement of oil tankers, putting upward pressure on global crude oil prices. “Crude oil is the mother of all prices. If this route is blocked or slowed, inflation in India could spike,” Saraf warned.
According to the Global Trade Research Initiative (GTRI), India’s exports to broader West Asia — including Iraq, Jordan, Lebanon, Syria, and Yemen — total around USD 8.6 billion, while imports stand at USD 33.1 billion. Any regional escalation could severely impact this $41.7 billion trade corridor.
While Indian authorities have yet to issue a formal statement, the Ministry of External Affairs is reportedly keeping a close watch. Businesses and trade bodies, meanwhile, are urging diplomatic efforts to de-escalate tensions and stabilize the region.
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