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    EYE ON INDIA                                                           MARCH 27, 2026      |  The Indian Eye                    6

                         Caught in the Crossfire: How

                  the Iran War Is Straining India’s

                                   Economy and Diaspora

                     From energy insecurity to human losses, the West Asia conflict is exposing India’s deep

                                                   vulnerabilities in an interconnected region

            OUR BUREAU
            Dubai / Doha/ New Delhi

                  s  the  conflict  involving  Iran
                  continues to destabilise West
            AAsia, its ripple effects are being
            felt acutely in India—a nation whose
            economic stability,  energy  security,
            and diaspora are tightly intertwined
            with the Gulf. What initially appeared
            to be a distant geopolitical crisis has
            rapidly evolved into a multi-dimen-
            sional challenge for New Delhi, af-
            fecting everything from fuel supplies
            to the safety of its citizens abroad.  The Indian-flagged vessel ‘Jag Laadki’, carrying approximately 80,886 MT of UAE-sourced crude oil, berthed at Adani Port, Mundra,
                The most immediate and human
            cost of the conflict has been borne by                               on Wednesday (Adani Port/ANI Video Grab)
            Indian nationals living and working in
            the region. According to the Ministry   of the situation. The need to reroute   “From that area… a lot of fuel is sup-  grappled with. Its reliance on import-
            of External Affairs (MEA), six Indi-  passengers through alternative air-  plied to the world. So it is very import-  ed energy, concentration of diaspora
            ans  have  lost  their  lives  in  separate   ports in Saudi Arabia illustrates how   ant for us and for the world,” Jaiswal   in conflict-prone regions, and depen-
            incidents across Gulf countries, while   quickly regional connectivity can col-  added. Any escalation that threatens   dence  on  specific  maritime  routes
            one remains missing. Aseem R. Ma-  lapse, stranding thousands and raising   shipping  lanes  could  disrupt  supply   collectively amplify its  vulnerability
            hajan, Additional Secretary (Gulf) at   logistical and humanitarian challeng-  chains, drive up oil prices, and exacer-  to external shocks. While diversifica-
            the MEA, confirmed that Indian mis-  es for Indian authorities.     bate inflationary pressures in India’s   tion  efforts  are  underway—such  as
            sions in Saudi Arabia, Oman, Iraq,    Beyond  the  immediate  human   already sensitive energy market.  increasing renewable energy capac-
            and the United Arab Emirates are   impact, the war has placed India’s en-  The economic implications ex-  ity  and exploring  alternative supply
            coordinating with local authorities to   ergy security under significant strain.   tend beyond fuel. Higher oil prices can   chains—the current situation demon-
            trace the missing individual and repa-  A substantial portion of India’s crude   widen India’s trade deficit, weaken the   strates  that  these transitions  are  far
            triate the deceased.              oil and gas imports flows through the   rupee, and increase the cost of living   from complete.
                These casualties underscore a   Strait of Hormuz, one of the world’s   for millions. Industries dependent on   In the final analysis, the war in-
            deeper  vulnerability:  India’s  vast  di-  most critical chokepoints. Any disrup-  stable energy inputs—from manufac-  volving Iran is not a distant geopolit-
            aspora in the Gulf, estimated in the   tion in this narrow waterway has glob-  turing to transportation—face uncer-  ical episode for India but a direct and
            millions, is directly exposed to region-  al consequences, but for India—one   tainty, potentially slowing economic   evolving crisis with tangible human,
            al instability. The crisis has triggered a   of the largest energy importers—the   growth. In this sense, the Iran con-  economic, and strategic consequenc-
            large-scale movement of people, with   stakes are particularly high.  flict is not just a foreign policy chal-  es. From the loss of lives and mass
            around 300,000 passengers returning   MEA spokesperson Randhir      lenge but a domestic economic risk.  evacuations to the looming threat
            to India since late February. While   Jaiswal emphasised this concern, reit-  At the diplomatic level, India   over energy supplies and trade routes,
            Mahajan  noted  that  “the  situation   erating India’s long-standing position   has adopted a cautious and bal-  the conflict has laid bare the intercon-
            continues to improve with additional   on ensuring “safe and free naviga-  anced  approach,  reflecting  its  com-  nectedness of India’s domestic stabili-
            flights operating,” the reliance on spe-  tion”  through  key  maritime  routes.   plex relationships in the region.   ty with developments in West Asia.
            cial and non-scheduled flights reveals   “Whether it is the Strait of Hormuz or   Prime Minister Narendra Modi has   As New Delhi continues to nav-
            the fragility of normal travel networks   any other water passage in the world,   engaged  with  multiple  global  lead-  igate this turbulent landscape, its im-
            in times of conflict.             it has been our side… that we are in   ers, including those from France,   mediate priorities remain clear: safe-
                Airspace disruptions have further   favour  of  safe  and  free  navigation,”   Jordan, and Malaysia, to push for   guarding its citizens, ensuring energy
            complicated mobility. While limited   he said. His remarks reflect the cen-  de-escalation. The emphasis, as ar-  security, and advocating for de-esca-
            flights  continue  from  the  UAE  and   trality of maritime security to India’s   ticulated by the MEA, remains on   lation. Yet, the broader lesson may lie
            Oman, and partial reopening in Qa-  economic interests.             “dialogue  and  diplomacy”  as  the   in the urgency of reducing structural
            tar has allowed some commercial ac-   The presence of 22 Indian ships   only viable path to restoring stability.  vulnerabilities—because  in  an  in-
            tivity, airspace closures in Kuwait and   operating in the Persian Gulf further   The crisis also exposes structur-  creasingly volatile world, distant wars
            Bahrain highlight the unpredictability   highlights  the  country’s  exposure.   al dependencies that India has long   are rarely distant for long.

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