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Petroleum is the astir contiguous country of exposure. In 2025, India sourced astir $70 cardinal crude lipid and petroleum products from West Asia. (AI image)
Beyond oil, the Middle East situation has different implications for the Indian economy, particularly if the US-Israel-Iran warfare continues for a agelong duration starring to large proviso disruptions. In caller days, a bid of rocket and drone attacks person struck aggregate vigor and logistics installations crossed the Gulf region.
These incidents person heightened concerns that shipments of lipid and state moving done the Strait of Hormuz - a captious artery for planetary vigor commercialized - could look disruption.Between March 1 and March 3, important facilities successful Saudi Arabia, Qatar, the United Arab Emirates and Oman came nether attack. The concern has fueled concerns that the struggle could trigger a wider daze to planetary vigor supplies.But beyond oil, it’s important to enactment that West Asia plays an important relation successful supplying India with indispensable commodities.
In 2025, India’s imports from the portion of astir $98.7 cardinal included captious resources specified arsenic energy, fertilisers and concern inputs.
1. Oil: Immediate risk
Petroleum is the astir contiguous country of exposure. In 2025, India sourced astir $70 cardinal crude lipid and petroleum products from West Asia.“Crude lipid feeds India’s refineries, which nutrient petrol, diesel, aviation substance and petrochemical feedstocks utilized crossed the economy.
India has astir 30 days of stocks, immoderate prolonged disruption successful shipments could rapidly propulsion up substance prices, raising transport and logistics costs and feeding into inflation. Farmers would besides consciousness the unit done higher diesel prices for irrigation pumps and tractors,” says Ajay Srivastava, laminitis of Global Trade Research Initiative (GTRI).Also Read | Russian crude to rescue! Ships carrying Russia’s lipid caput to India amid Middle East proviso shock: Report
2. LNG Supplies
Supplies of earthy state are besides exposed to imaginable disruptions.
In 2025, India sourced liquefied earthy state oregon LNG worthy $9.2 cardinal from West Asia, which is astir 68.4% of its full LNG imports. LNG is besides a cardinal input for fertilizer manufacturing units, gas-fired powerfulness plants and metropolis state organisation systems that supply compressed earthy state (CNG) for vehicles and piped state for household cooking.Signs of this vulnerability person already emerged. Qatar’s Petronet LNG halted LNG deliveries to GAIL starting March 4, 2026 owed to restrictions affecting vas movement.
3. Risks to LPG
Liquefied petroleum state (LPG) imports from West Asia were $13.9 cardinal successful 2025, making up 46.9 % of India’s full LPG purchases. LPG continues to service arsenic the main cooking substance for millions of households. With reserves covering lone astir 2 weeks of consumption, immoderate interruption successful proviso could rapidly interaction the availability of cooking fuel.
4. Exposure successful Fertiliser Supplies
India’s cultivation assemblage could besides consciousness the interaction done fertiliser imports, says GTRI successful its report.
In 2025, fertiliser purchases from West Asia stood astatine $3.7 billion. Any disruption successful supplies during the harvest rhythm could pb to reduced fertilizer availability, summation the government’s subsidy load and yet propulsion up nutrient prices.Also Read | India’s vigor information vulnerability to Middle East: How overmuch oil, LPG, LNG reserves bash we have?
5. Diamond Trade and Exports
India’s diamond export assemblage is besides intimately tied to supplies from the Gulf. Diamonds of astir $6.8 cardinal were imported from the Middle East successful 2025, which is 40.6% of its full imports of these stones.
Rough diamonds are successful crook processed successful India’s cutting and polishing centres, particularly successful Gujarat’s Surat, earlier being exported to planetary markets arsenic polished gems. Any interruption successful the travel of earthy diamonds could dilatory manufacturing enactment and person an interaction connected employment wrong the jewellery industry.
6. Industrial Raw Material Supplies
A fig of concern inputs sourced from the Gulf are besides important for India’s manufacturing sector.
India bought polyethylene polymers of astir $1.2 cardinal from West Asia successful 2025. Polyethylene is wide utilized successful products specified arsenic packaging materials, integrative piping, retention containers, user goods and cultivation films utilized successful irrigation systems.
7. Construction-Related Materials
India’s operation manufacture besides relies heavy connected mineral imports from the region. In 2025, the state imported limestone worthy $483 cardinal from West Asia.
Limestone is simply a cardinal constituent successful cement production, and hence immoderate shortage could rise the outgo of cement, thereby perchance slowing infrastructure development.
8. Metals Supply Chains
Supply links with West Asia besides widen to the metals sector. India imported nonstop reduced robust of astir $190 cardinal from the Middle East portion successful 2025. Additionally, the state sourced copper ligament worthy $869 cardinal from West Asia. Copper ligament is wide utilized successful powerfulness transmission networks, electrical machinery and renewable vigor infrastructure.As GTRI notes: Together, these figures item however intimately India’s system is tied to West Asian proviso chains. “If disruptions to shipping done the Strait of Hormuz proceed beyond a week, the effects could rapidly dispersed from vigor markets to fertiliser supplies, manufacturing inputs, operation materials and export industries specified arsenic diamonds. What begins arsenic a determination struggle could rapidly germinate into a broader proviso daze for the Indian economy,” the GTRI study concludes.
