US Role In Israel-Iran War Raises Concerns For India’s Exports & Imports

New Delhi, Jun 23 (KNN) With the United States launching strikes on key Iranian nuclear facilities amid the ongoing Israel-Iran conflict, Indian exporters and importers are growing increasingly anxious about the potential fallout.

The Ministry of Commerce and Industry is monitoring the situation closely and is in touch with relevant stakeholders to assess emerging risks and initiate timely interventions if needed, a source confirmed, according to the businessline.

"For India, this is a moment of high stakes—demanding its most delicate diplomatic balancing act yet to safeguard core interests and steer clear of entanglement in a spiralling global conflict," said Ajay Srivastava, Co-founder, Global Trade Research Initiative (GTRI).

Industry leaders warn that the geopolitical flashpoint could severely affect trade logistics, raise insurance premiums, and disrupt regional supply chains. 

"While it's too early to assess the full impact, such tensions often lead to increased volatility in oil prices, currency movements, and shipping routes all of which are relevant to exports," Sahai told businessline.

The Red Sea and the Strait of Hormuz, critical arteries for global shipping, are particularly vulnerable. A blockade of the Strait by Iran—a scenario that is now under watch—could severely disrupt energy supplies and trade routes, including India’s vital crude imports.

At the moment, there is not much the government could do in terms of addressing the situation, said Pankaj Chadha, Chairman, EEPC India. "We are all just hoping that the war does not expand," he added.

Although bilateral trade with Iran has dwindled to about USD 1.7 billion due to longstanding US sanctions, India’s strategic concern lies in safeguarding its investments in the Chabahar port. 

This infrastructure project is seen as a crucial gateway to Afghanistan and Central Asia, allowing India to bypass Pakistan and bolster regional connectivity.

A wider regional escalation could threaten India’s significantly larger trade with the broader West Asian region, where exports total USD 8.6 billion and imports amount to USD 33.1 billion, said Srivastava.

(KNN Bureau)