A catchy conflagration
The escalating conflict between Israel and Iran in West Asia has triggered global concern, with India, too, watching closely due to its strategic and economic interests in the region. Indian Prime Minister Narendra Modi held an urgent Cabinet Committee on Security meeting on Thursday. The top-level meeting, in itself, reflects India’s immediate focus on the crisis. The country’s critical interests—ranging from oil supplies to maritime trade and the safety of millions of Indians in the region—are at risk as West Asia appears to be teetering on the edge of a wider war.
The latest flare-up was marked by Iran's firing of around 200 missiles into Israel. This is the second major escalation in six months. Experts suggest that such hostilities have the potential to threaten and disrupt India’s trade routes through the Red Sea and Gulf of Aden, both vital for Indian exports. Iranian-backed Houthi militia attacks on these routes are already reported to have caused major disruptions—leading to a steep decline in India's petroleum exports, which reportedly dropped by 37 per cent in August 2024. It may be noted that the Gulf nations supply India with 80 per cent of its oil. This, obviously, makes any conflict-induced spike in oil prices a serious concern for the Indian economy. The potential rise in freight costs and oil prices will likely widen India’s trade deficit and push inflation upwards. Though petroleum prices in India are deregulated, any surge in crude costs could still increase the prices of commodities like fertilisers and natural gas. Such surges will undoubtedly strain the country’s finances.
Diplomatically, India is nudged to walk a tightrope in the real sense of the term. Israel is a key defence partner and provides vital military and intelligence support, while Iran is crucial for India’s energy security and its strategic foothold in the region, particularly through the Chabahar port. Tensions between the two of India’s allies have put it in an uncomfortable position. The clumsiness of the situation will only grow in case there is any widening of the conflict. This would make neutrality harder to maintain. However, India has been dealing deftly with such situations for the past couple of years—be it the Russia-Ukraine conflict or that between Israel and Hamas. In the past, the Indian Prime Minister has engaged with both Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas, urging restraint. However, India’s ability to broker any sort of peace has not been on display thus far. Going forward, the best bet for India will be to stick to its core national interests as a guiding light.
One must also not forget that beyond trade and diplomacy, the safety of the 90 lakh Indians in the Gulf—including 18,000 in Israel—is at stake. A full-scale conflict would eventually create a situation for evacuation efforts—a logistical challenge India has managed before, but one that would stretch resources in the midst of an already volatile situation. To sum up, for India, the West Asian crisis presents multi-layered challenges. The country must safeguard its economic interests, protect its citizens, and navigate a catchy diplomatic scenario, all while urging for peace. New Delhi’s approach—focused on restraint and dialogue—will be critical in determining its role amid the escalating conflict.
