Bad News for India as Donald Trump's air strikes on Iran likely to put India's Rs 334000000000 trade in trouble, PM Modi now plans to...

Prime Minister Narendra Modi
New Delhi: The strikes by the United States on three nuclear sites in Iran on Saturday night have raised a big concern for India as well. According to the reports, if the conflict escalates, over USD40 billion worth of trade with key regions of West Asia at risk. However, it is important to note that if India has less to lose if the war remains contained.
Talking to Moneycontrol, Global Trade Research Initiative's founder Ajay Srivastava said that any disruption to shipping lanes, port access, or financial systems in this corridor would 'severely impact India's trade flows, inflate freight and insurance costs, and introduce fresh supply chain risks for Indian businesses.'
The US' involvement in the conflict has raised concerns that Tehran may choose to retaliate by attacking American military bases in the West Asian region such as in Qatar. Apart from that, Iran's parliament has approved a measure to close the strategically vital Strait of Hormuz, their state-run Press TV reported on June 22. Iran's parliamentary vote is not binding, and a final decision has to be taken by the Supreme National Security Council. Trade Issues
The recent developments are unlikely to significantly affect New Delhi's trade with Gulf nations, which exceeded USD 220 billion in the previous fiscal year. However, rising oil prices and potential disruptions in key maritime routes like the Strait of Hormuz and the Red Sea could pose serious challenges for Indian shipments.
It is important to note that India's bilateral trade with other West Asia countries comprising of Iran, Iraq, Israel, Jordan, Lebanon, Syria and Yemen, at USD 41.8 billion in FY25. Out of this, with Iran and Israel, India's trade was only $5.4 billion in the previous financial year.
India is especially vulnerable to a possible Strait of Hormuz closure. 'Nearly two-thirds of its crude oil and half of its LNG imports transit this route. Any closure could send oil prices soaring, sharply inflating India's import bill, worsening inflation, and putting pressure on the country's fiscal position. Shipping insurance premiums and freight costs are also expected to surge, squeezing not only India's energy markets but also broader trade between Asia and Europe,' Srivastava said.

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