India to Face Economic Blow: Iran-Israel Conflict to Make These Essentials Costlier

New Delhi (The Uttam Hindu): Iran has strongly condemned the US attacks on its nuclear facility. Iran has called it a 'brutal military attack' and called it a gross violation of international law and the United Nations Charter. At the same time, experts believe that if this war deepens further, then its biggest impact will be on India's trade with the countries of West Asia. This includes countries like Iran, Iraq, Jordan, Lebanon, Syria and Yemen, where India's total exports reach 8.6 billion dollars and imports reach 33.1 billion dollars.

India exported a total of $1.24 billion to Iran in the financial year 2024-25, which included agricultural products such as Basmati rice ($753.2 million), bananas, soya meal, chickpeas and tea. During this period, India also imported $441.8 million from Iran. India's trade with Israel stood at $2.1 billion (exports) and $1.6 billion (imports). According to GTRI, both these countries are already under financial pressure due to US sanctions. Now India's trade may be further affected due to the increase in payment systems and shipping risks due to the war. The biggest concern is about the Strait of Hormuz, from where 60-65% of India's crude oil is supplied. Iran has threatened to close this waterway. This route is so important that it alone handles about 20 percent of the global oil trade.

The strait lies between Iran and Oman/UAE, and carries oil and LNG exports from Saudi Arabia, Iran, Iraq, Kuwait and Qatar. India, which is dependent on imports for more than 80% of its energy needs, will face fuel prices rising, inflation rising, the rupee under pressure and the fiscal balance may deteriorate if supplies are disrupted.

India shares historical and strategic ties with Iran. The Chabahar port, which gives India direct access to Afghanistan and Central Asia, is an important part of India's policy. India also shares strong ties with the US, Israel and Gulf countries. The involvement of all of them in the war has further complicated India's diplomatic position.

The CEO of FIEO said that currently there are two wars going on in the world. Due to this, the demand for non-essential luxury goods in the European market has decreased rapidly. Due to this, the demand for carpets and other luxury goods exported from India has also decreased significantly.