- Inflation will increase in India due to the war situation in the Middle East? Crisis on oil, trade and employment
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- Direct impact of the war on India? Gulf tensions put pressure on ports, trade and employment
Uran: Given India’s close economic and trade ties with the Gulf countries, the possibility of war-related tensions arising in the region will have an impact on the Indian economy. Experts are of the opinion that the situation may directly or indirectly affect trade, oil/gas supply, employment and the daily life of ordinary citizens.
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India’s major export-import trade is with Middle Eastern countries. Fruits, vegetables, rice, meat, textiles, medicines and various industrial goods are exported from India on a large scale, especially to UAE, Saudi Arabia, Qatar, Oman and Kuwait. The war situation is likely to affect the export process due to disruption of sea routes, increase in shipping costs and increase in insurance premiums. (Photo Courtesy – Pinterest)
As a result, there have been incidents of containers getting stuck at some places. The impact may also be felt at major ports in India, particularly at ports like the Jawaharlal Nehru Port, which is likely to create strain on traffic. The effect of all these situations is likely to be felt eventually by the common citizens. Problems such as increase in petrol and diesel prices, increase in cost of food grains and essential commodities, increase in transport costs and increase in inflation may arise. According to experts, keeping an eye on the situation, the Indian government can take measures like exploring alternative trade routes, increasing oil imports from other countries, strengthening port management and helping exporters.
If the war continues for a long time, exports will decrease
Industry and business sector are also likely to be affected by this situation. The Middle East is a major market for India’s agricultural products, seafood, textile industry and pharmaceutical industry. If the war situation persists for a long time, exports may decrease and financial pressure may be put on the industries. At the same time, it is likely to affect Indian companies working in infrastructure and construction projects in the Middle East.
This tension also affects the energy sector
The energy sector may also be affected by this tension. India imports a large portion of its crude oil requirements from the Middle East, particularly Iraq, Saudi Arabia, and the UAE, which are India’s major oil suppliers. The war situation is likely to increase crude oil prices in the global market and this may affect the prices of petrol and diesel in the country. A rise in fuel prices increases transport costs and has an impact on commodity prices, leading to a rise in inflation.
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Impact on employment of workers
This situation is also considered a concern in terms of employment. About 80 to 90 lakh Indian nationals are working in various sectors in the Gulf countries. If the war situation intensifies, there may be a slowdown in some industries and projects, thus affecting the employment of workers. Due to this, if the number of workers returning to India increases, it may also create a strain on domestic employment. Also, a large amount of foreign exchange comes to India every year from Indians working abroad. These inflows may decrease if employment conditions in the Middle East deteriorate. This can affect the financial status of many families as well as the economy of the country.
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