Israel-Iran War Tension: How Rising Conflict Could Impact Indian Trade, Energy Prices, Export Chains, Import Chains & More

Israel-Iran War Tension: The escalating Israel-Iran conflict, which includes US military actions, has created international trade concerns, especially for countries that depend on energy resources such as India. Here’s what the current conflict could mean for imports, exports, logistics, and markets. 

Israel-Iran War Tension: Could the Israel‑Iran War Affect India’s Trade (Imports)?

• India depends on international sources for more than 80% of its crude oil, which it brings through the Strait of Hormuz.
• Shipping route disruptions will cause fuel prices and import expenses to rise dramatically.
• Higher logistics costs will create delays throughout supply chains which handle intermediate goods.

Israel-Iran War Tension: Could the Israel‑Iran War Affect India’s Trade (Exports)?

• Middle Eastern maritime routes serve as essential pathways for export shipments that connect Europe and North America.
• The rising costs of shipping and insurance will cause delays for export shipments, which involve textiles, chemicals, and engineering products.

Israel-Iran War Tension: India's Trade With Israel & Iran

• India imports high-tech and defence goods from Israel. Conflict could affect supply chains and investor confidence.
• The sanctions on Iran restrict Indian trade but allow limited transactions, which include basmati rice and petrochemical products. The shipping disruptions, together with payment uncertainties, will cause further delays in export operations.

Energy, Shipping Routes & Logistics

• The Strait of Hormuz disruption jeopardizes 50% of India's oil imports.
• The Red Sea and Gulf maritime routes will need to make detours, which will result in higher freight charges.
• Marine insurance costs and risk surcharges continue to increase.

Israel-Iran War Tension: What are the Market, Costs & Economic Sentiment

• Fuel prices will increase, which will lead to higher petrol, diesel, and LPG prices.

• The logistics industry will impose higher costs for freight‑intensive products, which will raise their market prices.

• Indian markets will experience price fluctuations, which will affect inflation rates, rupee value, and investor trust.

India’s direct trade with Israel and Iran is limited, but the war’s broader impact on energy imports, shipping, logistics, and commodity prices could significantly affect the economy. Policymakers and businesses must monitor developments closely, diversify supply chains, and plan for potential disruptions to mitigate economic risks.