The sudden airstrikes by Israel on Iran's nuclear sites have shaken up the energy markets around the world. The situation in West Asia (Middle East) remains tense due to the Israeli attack. The conflict between these two countries has led to a sharp rise in crude oil prices. At the same time, the Israel-Iran war can have a great impact on India.
The Iran-Israel war will affect India's crude oil supply and economic development. This conflict is not a good sign for regional peace, stability, economic growth and development. If we talk about the impact in the near future, the conflict will not have any significant impact on the economy in the short term; however, if the war drags on, difficulties may arise.
What will be the effect if the war lasts for a long time?
If the war between Iran and Israel continues for a long time, the slowdown in the global economy will have a negative impact on the Indian economy and this may also affect India's exports. At the same time, the slowdown in exports will affect India's already stressed manufacturing activity.
Crude oil prices will rise
Any conflict between Israel and Iran could lead to a sharp rise in crude oil prices. India's oil import bill is Rs 20.6 lakh crore in 2024-25. But if the war continues for a long time, the price of crude oil will increase and India's expenditure will also increase.
The value of the dollar will rise against the rupee
An increase in oil prices leads to a depreciation of the rupee as the higher import bill increases the demand for the US dollar and the increase in the value of the dollar will increase India's import bill. If the rising oil prices are controlled through a reduction in excise duty, it will impact government revenue.
The value of the dollar will rise against the rupee
An increase in oil prices leads to a depreciation of the rupee as the higher import bill increases the demand for the US dollar and the increase in the value of the dollar will increase India's import bill. If the rising oil prices are controlled through a reduction in excise duty, it will impact government revenue.
How will it affect Indian diaspora?
The turmoil caused by the Iran-Israel war will have an impact on the security of the large Indian diaspora living in the Gulf region. The Indian diaspora population in the Gulf Cooperation Council (GCC) countries is more than 9 million. India also leads in terms of the number of super-rich individuals living in the Gulf. This will have a negative impact on Indian interests (diaspora, trade, investment) there.
Trade will also be affected
The Gulf Cooperation Council (GCC) is India's largest regional-block trading partner. Trade with the GCC was about 16% of India's total trade in FY 2022-23. Total trade in 2023-24 was about Rs 14.4 lakh crore.
There will be a decrease in the amount of money sent to the country by Indians
In the year 2024, about Rs 10.7 lakh crore was sent to India by Indians living abroad. One-third of the total money sent by Indians, about Rs 3.6 lakh crore, comes from the Middle East countries. Conflict in the Middle East will have a negative impact on this and will also affect the job prospects of Indians there.
