India is closely monitoring the impact of the escalating Israel-Iran conflict, which threatens to disrupt energy supplies, trade, and regional connectivity. The government is conducting daily reviews and preparing contingency plans, particularly if the vital Strait of Hormuz is affected.

Energy Security at Risk

Around 40% of India’s crude oil and 54% of its LNG imports pass through the Strait of Hormuz. While there’s no immediate impact on oil prices or supply, the government remains cautious, citing adequate reserves for now.

Freight and Shipping Costs Climb

Air freight rates have jumped 10–15% due to airspace closures over Iran, Israel, and Pakistan. Exporters also expect higher shipping costs due to war surcharges, rising fuel prices, and increased insurance premiums.

Exports to Iran May Take a Hit

India may face lower demand from Iran for key exports, such as basmati rice, soybeans, and tea. Exporters are in talks with the government to assess risks and find ways to limit the damage.

Chabahar Port Project Delayed

The conflict is also affecting India’s strategic Chabahar Port in Iran—a key link to Afghanistan and Central Asia. Expansion and rail connectivity plans have slowed, potentially delaying India’s regional trade ambitions.

Indian Nationals in Iran Evacuated

With about 10,000 Indians in Iran, including 4,000 students, the government has started evacuations. Exams have been postponed, and safety concerns remain high.

India is facing the ripple effects of the Israel-Iran conflict on several fronts. While the government says short-term risks are under control, it remains alert and ready to respond as the situation evolves.

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