Impact of Iran-Israel Conflict on India's West Asian Trade

India's trade with West Asian countries faces substantial risks as the conflict between Iran and Israel escalates. Experts warn that India's exports to both nations have already felt the impact, signaling broader economic repercussions. The situation is compounded by a U.S. strike on Iranian sites, intensifying fears of a regional conflict.

Sharad Kumar Saraf, an exporter in Mumbai, has voiced concerns about the potential cascading effects on trade routes. As Indian consignments reroute due to safety concerns, rising crude oil prices threaten inflationary pressures back home. The Strait of Hormuz, a key maritime corridor for India's crude imports, faces possible disruption.

The Global Trade Research Initiative (GTRI) emphasizes that any blockage or escalation in vital shipping lanes could aggravate India's trade and energy situations, drive up shipping costs, and pose challenges to fiscal management. The ongoing strife also jeopardizes India's crucial economic relations with Iran, the U.S., Israel, and Gulf Arab states.

(With inputs from agencies.)