Middle East tensions escalate: How Iran's missile strikes on Israel could impact India’s economy

NEW DELHI: Tensions in the Middle East surged after Iran launched a barrage of nearly 200 missiles on Israel, following an Israeli strike on Hezbollah in Lebanon. The region is now on high alert, with the world waiting to see how Israeli Prime Minister Benjamin Netanyahu will react to this bold offensive from Tehran.
But while the Middle East faces its own turmoil, the ripple effects are already being felt far beyond its borders — particularly in India.Why should India care? Because these tensions could have serious consequences for everything from oil prices to trade relationships.
Oil prices on the rise
Iran is a powerhouse in the global oil market as a key member of OPEC, and the recent missile strikes have spooked oil markets. Following the attacks, US West Texas Intermediate (WTI) crude futures jumped $1.09 to $70.92 per barrel. If the conflict worsens, we could see an even steeper hike in oil prices, and guess who’s going to feel the burn? Yep, India.
India is heavily dependent on Middle Eastern oil, and any disruption in supply could seriously mess with the country's energy security. The cost of petrol and diesel could rise, and that’s never good news for everyday consumers or businesses.
Also read: Iran-Israel conflict sparks oil price concern: How will it impact India?
India-Middle East: An economic power couple
India and the Middle East have more than just oil between them — their trade relationship is a big deal. India exports everything from machinery to pharmaceuticals, while Middle Eastern countries send oil, natural gas, and fertilizers to India. Bilateral trade between India and the region stands at a whopping $195 billion!
But it’s not just about goods. Investments from the Middle East have flowed into Indian infrastructure, tech startups, and more. At the same time, Indian companies are making their mark in construction and hospitality across the Gulf. Any instability in the Middle East could put these economic ties in jeopardy.

What about India's workforce?
Here’s another wrinkle: around 9 million Indians work in Gulf countries, sending home millions in remittances that fuel the Indian economy. If the conflict drags on, it could disrupt jobs and incomes for these workers, with potentially severe consequences for families back home.
What's next for India’s trade plans?
India is also in talks with several Gulf nations about potential free trade agreements (FTAs). These could supercharge trade and investment flows between the regions, but regional instability might throw a wrench in those plans.
So while the missiles may be flying thousands of miles away, the impact could land squarely in India's economy. How long the conflict lasts and how it evolves will be key in determining just how hard India feels the pinch. Stay tuned—this is one situation where the global ripple effects could be felt in every part of daily life.