Ram Rattan Sharma
internetzonejammu@gmail.com
The escalating US–Israel–Iran war has sent a fresh warning to India: What happens in West Asia does not stay in West Asia. For a country that imports most of its crude oil and depends heavily on the Gulf for trade, remittances, and energy security, any prolonged conflict in the region quickly turns into a domestic economic concern.
India has long benefited from a careful balancing act in West Asia, maintaining working ties with Israel, Iran, the Arab Gulf, and the United States. But war narrows diplomatic space. As tensions rise, New Delhi must protect its strategic autonomy while ensuring that supply chains, citizensabroad, andinflation at home do not suffer.
Energy and Prices
The most immediate impact is on energy. Reports in 2026 showed that India’s crudeimports were disrupted by the grandwar. With middle eastern oil volumes falling sharply at one point, and refiners diversifying toward Russia and the UAE to keep supplies stable. Since India imports roughly 88 percent of its crude needs, even a brief shock in the Gulf can raise fuel costs and ripple through transport, food, fertilisers, and manufacturing prices.
The Strait of Hormuz remains the most sensitive choke point. Around half of India’s crude oil, about 70 percent of its LPG, and nearly 90 percent of its LNG move through or are linked to this route, making any disruption a direct threat to energy security. Even when supplies continue, the mere fear of closure increases shipping costs, insurance premiums, and market volatility.
Trade and Supply Chains
The war also affects India’s trade beyond oil. Engineering exports to West Asia and North Africa were reported to have fallen during the period of disruption because ships had to take longer routes and face higher logistics costs. For exporters, that means delays, cost escalation, and uncertainty in delivery schedules, all of which weaken competitiveness.
India’s broader supply chains are also vulnerable. Fertilisers, petrochemical edible oils, and industrial inputs become more expensive when freight and energy prices rise together. In effect, a war thousands of kilometres away can quietly add pressure to India’s production costs and consumer inflation.
Remittances and Diaspora
Another major concern is the Indian diaspora in the Gulf. Millions of Indians work in West Asia, and remittances from the region remain a crucial support for Indian households and the national economy. When conflict creates uncertainty, the risk is not only lower job security abroad but also temporary delays in wage flows, repatriation challenges, and stress on family incomes back home.
This is especially important for states and districts where Gulf remittances sustain education, housing, and small business activity. Any prolonged regional instability can therefore have social consequences far beyond macro-economic headlines.
Strategic Choices for India
India’s response should combine caution with preparedness. On the economic side, it needs diversified energy sourcing, higher strategic reserves, and stronger shipping contingency planning. On the diplomatic side, it should continue engaging all major players while urging de-escalation and maritime security in the Gulf.
The larger lesson is simple: India cannot afford strategic complacency in a connected world. The US–Israel–Iran war is a reminder that national security today includes oil supply, sea lanes, remittances, and inflation control, not just borders and armies. India must treat US-Israel-Iran war not as distant geopolitical criis but an immediate test of energy security of its trade resilience, and diplomatic skill. The deeper the conflict runs, the greater the pressure on fuel prices, imports, remittances, and economic stability at home.
(The author is Former Deputy Librarian, University of Jammu)
