Business
Beyond oil: How US-Iran war & Middle East crisis may hit India’s economy – sector-wise impact explained – The Times of India
Beyond oil, the Middle East crisis has other implications for the Indian economy, especially if the US-Israel-Iran war continues for a long duration leading to major supply disruptions. In recent days, a series of missile and drone attacks have struck multiple energy and logistics installations across the Gulf region. These incidents have heightened concerns that shipments of oil and gas moving through the Strait of Hormuz – a vital artery for global energy trade – could face disruption.Between March 1 and March 3, important facilities in Saudi Arabia, Qatar, the United Arab Emirates and Oman came under attack. The situation has fueled concerns that the conflict could trigger a wider shock to global energy supplies.But beyond oil, it’s important to note that West Asia plays an important role in supplying India with essential commodities. In 2025, India’s imports from the region of approximately $98.7 billion included critical resources such as energy, fertilisers and industrial inputs.
1. Oil: Immediate risk
Petroleum is the most immediate area of exposure. In 2025, India sourced roughly $70 billion crude oil and petroleum products from West Asia.“Crude oil feeds India’s refineries, which produce petrol, diesel, aviation fuel and petrochemical feedstocks used across the economy. India has about 30 days of stocks, any prolonged disruption in shipments could quickly push up fuel prices, raising transport and logistics costs and feeding into inflation. Farmers would also feel the pressure through higher diesel prices for irrigation pumps and tractors,” says Ajay Srivastava, founder of Global Trade Research Initiative (GTRI).Also Read | Russian crude to rescue! Ships carrying Russia’s oil head to India amid Middle East supply shock: Report
2. LNG Supplies
Supplies of natural gas are also exposed to potential disruptions. In 2025, India sourced liquefied natural gas or LNG worth $9.2 billion from West Asia, which is around 68.4% of its total LNG imports. LNG is also a key input for fertilizer manufacturing units, gas-fired power plants and city gas distribution systems that provide compressed natural gas (CNG) for vehicles and piped gas for household cooking.Signs of this vulnerability have already emerged. Qatar’s Petronet LNG halted LNG deliveries to GAIL starting March 4, 2026 due to restrictions affecting vessel movement.
3. Risks to LPG
Liquefied petroleum gas (LPG) imports from West Asia were $13.9 billion in 2025, making up 46.9 % of India’s total LPG purchases. LPG continues to serve as the main cooking fuel for millions of households. With reserves covering only about two weeks of consumption, any interruption in supply could quickly impact the availability of cooking fuel.
4. Exposure in Fertiliser Supplies
India’s agricultural sector could also feel the impact through fertiliser imports, says GTRI in its report. In 2025, fertiliser purchases from West Asia stood at $3.7 billion. Any disruption in supplies during the crop cycle could lead to reduced fertilizer availability, increase the government’s subsidy burden and eventually push up food prices.Also Read | India’s energy security exposure to Middle East: How much oil, LPG, LNG reserves do we have?
5. Diamond Trade and Exports
India’s diamond export sector is also closely tied to supplies from the Gulf. Diamonds of around $6.8 billion were imported from the Middle East in 2025, which is 40.6% of its total imports of these stones. Rough diamonds are in turn processed in India’s cutting and polishing centres, especially in Gujarat’s Surat, before being exported to international markets as polished gems. Any interruption in the flow of raw diamonds could slow manufacturing activity and have an impact on employment within the jewellery industry.
6. Industrial Raw Material Supplies
A number of industrial inputs sourced from the Gulf are also crucial for India’s manufacturing sector. India bought polyethylene polymers of around $1.2 billion from West Asia in 2025. Polyethylene is widely used in products such as packaging materials, plastic piping, storage containers, consumer goods and agricultural films used in irrigation systems.
7. Construction-Related Materials
India’s construction industry also relies heavily on mineral imports from the region. In 2025, the country imported limestone worth $483 million from West Asia. Limestone is a key ingredient in cement production, and hence any shortage could raise the cost of cement, thereby possibly slowing infrastructure development.
8. Metals Supply Chains
Supply links with West Asia also extend to the metals sector. India imported direct reduced iron of around $190 million from the Middle East region in 2025. Additionally, the country sourced copper wire worth $869 million from West Asia. Copper wire is widely used in power transmission networks, electrical machinery and renewable energy infrastructure.As GTRI notes: Together, these figures highlight how closely India’s economy is tied to West Asian supply chains. “If disruptions to shipping through the Strait of Hormuz continue beyond a week, the effects could quickly spread from energy markets to fertiliser supplies, manufacturing inputs, construction materials and export industries such as diamonds. What begins as a regional conflict could rapidly evolve into a broader supply shock for the Indian economy,” the GTRI report concludes.
Last Updated:
Every $10 rise in global crude oil prices could shave around 0.5 percentage points off India’s GDP growth, say experts
India imports nearly 50 percent of crude oil from the Middle East
Every $10 rise in global crude oil prices could shave around 0.5 percentage points off India’s GDP growth, underscoring the country’s heavy reliance on imported oil and vulnerability to global energy volatility, Vandana Bharti, Research Head–Commodity at SMC Global Securities, told ANI.
In an interview with ANI, Bharti said escalating geopolitical tensions in West Asia pose a significant economic risk for India as crude prices climb and supply chains face potential disruptions.
“Every $10 increase in crude oil prices impacts India’s GDP by roughly 0.5%. We have already seen prices rise by about $10–$15 recently, and the economic impact will eventually reflect in growth numbers,” she said.
West Asia tensions driving oil prices higher
The surge in oil prices follows intensifying tensions involving the United States, Israel and Iran, particularly around the Strait of Hormuz — a critical maritime corridor through which roughly 20–25% of global oil shipments pass.
Bharti said the conflict has injected additional uncertainty into global energy markets and added what she described as a “war premium” to crude prices.
“It’s not just about the possibility of the Strait of Hormuz closing. Insurance costs and freight charges are rising, and shipments are being rerouted. All these factors add a war premium to crude oil prices and increase market uncertainty,” she said.
Risks extend beyond shipping
According to Bharti, the risks go beyond maritime routes and extend to energy infrastructure itself.
“Energy sites such as crude oil facilities and LNG plants are potential targets. There are also concerns about seabed cables and other critical infrastructure. So the threat is not only to energy supply but also to broader global trade and connectivity,” she noted.
Crude prices rise sharply
Oil prices have already surged as tensions intensified in the region.
Bharti said crude climbed from around $69 per barrel to nearly $78 per barrel within a week.
“In just one week we have seen prices move from about $69 to $78 per barrel. If tensions persist, crude could rise further to around $85–$87 per barrel in the coming days,” she said.
India’s reliance on Middle Eastern crude
India remains particularly vulnerable to such price shocks due to its heavy dependence on imported oil.
Bharti noted that roughly half of India’s crude imports come from the Middle East, and many domestic refineries are specifically configured to process Middle Eastern crude grades.
“India imports nearly 50% of its crude from the Middle East, so any disruption in the region directly impacts supply availability and pricing,” she said.
India maintains strategic petroleum reserves that can help cushion short-term disruptions, but Bharti emphasised that these are primarily meant for emergencies.
“We have reserves that can last about 25–30 days in emergency situations, but the structural dependence on Middle Eastern supply remains,” she said.
She added that even brief supply disruptions could trigger volatility across Asian financial markets.
“Even a two-week disruption could create significant volatility in Asia. We are already seeing pressure on currencies, equity outflows and rising economic uncertainty,” Bharti said.
Diversification may cushion the impact
Bharti said India could mitigate some risks by diversifying crude supply sources.
“Russia has been offering crude at discounted prices, so India may increase purchases from Russia or other suppliers if required. Adjusting supply chains and renegotiating trade arrangements can provide some relief,” she said.
She also pointed out that members of the Organization of the Petroleum Exporting Countries (OPEC) may attempt to stabilise prices, although security concerns could limit immediate production increases.
Impact on fertilisers and agriculture
Higher crude prices could also ripple into other sectors of the economy.
Bharti warned that rising energy costs may push up fertiliser prices and agricultural input costs, potentially affecting the upcoming kharif crop season.
“Higher energy costs could make fertilisers and farm inputs more expensive, which may increase the cost of cultivation for farmers,” she said.
Renewables gain strategic importance
Bharti added that the ongoing geopolitical tensions highlight the need for countries to accelerate the transition to renewable energy.
“Events like this are a wake-up call. Governments may increasingly prioritise renewable energy such as solar to reduce dependence on volatile fossil-fuel supply routes,” she said.
Click here to add News18 as your preferred news source on Google.
Follow News18 on Google. Join the fun, play games on News18. Stay updated with all the latest business news, including market trends, stock updates, tax, IPO, banking finance, real estate, savings and investments. To Get in-depth analysis, expert opinions, and real-time updates. Also Download the News18 App to stay updated.
March 06, 2026, 08:16 IST
Read More
The supply chain risk designation of the artificial intelligence firm is a first for a US company.
Source link
Thomas Fuller | SOPA Images | Lightrocket | Getty Images
UniQure needs to run another study to prove that its gene therapy “actually helps people with Huntington’s disease,” a senior U.S. Food and Drug Administration official said on a call with reporters Thursday.
The official, who requested anonymity before discussing sensitive information, confirmed the agency has asked the company to run a placebo controlled trial of its treatment, which is administered directly into the brain. UniQure has said that type of study isn’t ethical because it would require putting people under general anesthesia for hours, a characterization the official disputed.
“So what is really going on? UniQure is the latest company to make a failed therapy for Huntington’s patients,” the official said. “They likely acknowledge or understand at some deep level that their trial failed years ago, and instead of doing the right thing and running the correct clinical study, UniQure is performing a distorted or manipulated comparison in the mind of FDA.”
The comments mark the latest development in a messy public spat between UniQure and the FDA, and as the agency comes under fire for a number of recent drug approval application rejections, including some where companies have accused it of going back on previous guidance. FDA Commissioner Marty Makary in an interview with CNBC’s Becky Quick last week seemingly criticized UniQure’s gene therapy for Huntington’s disease. Makary didn’t name UniQure but described its treatment.
UniQure then accused the FDA of reversing its stance that the company’s clinical trial data would be sufficient to seek approval. UniQure’s study used an outside database to measure how patients with Huntington’s disease might decline without treatment, known as an external control. UniQure has said it wouldn’t be feasible to run a true randomized, double-blind placebo-controlled study, considered the gold standard, because it wouldn’t be ethical to make people undergo a sham hours-long brain surgery.
The FDA official said the agency “never agreed to accept this distorted comparison” and the FDA “never makes such assurances.” Instead, the “FDA will always say, ‘Well, we have to see the data when we get it.'”
UniQure didn’t immediately comment.
The company’s stock rose more than 10% on Thursday and has fallen 58% this year as of Thursday afternoon.
How Costly Is A $10 Oil Spike For India’s Economy?
Jayson Tatum, 10 months after Achilles injury, expected to return to Celtics Friday vs Mavericks: report
Maisie Peters surprises fans in Australia with Ed Sheeran
Policy easing drives Argentina’s garment import surge in 2025
What are Iran’s ballistic missile capabilities?
India Us Trade Deal: Fresh look at India-US trade deal? May be ‘rebalanced’ if circumstances change, says Piyush Goyal – The Times of India
-
Fashion1 week agoPolicy easing drives Argentina’s garment import surge in 2025
-
Politics1 week agoWhat are Iran’s ballistic missile capabilities?
-
Business7 days ago
India Us Trade Deal: Fresh look at India-US trade deal? May be ‘rebalanced’ if circumstances change, says Piyush Goyal – The Times of India
-
Business1 week agoAttock Cement’s acquisition approved | The Express Tribune
-
Politics1 week agoUS arrests ex-Air Force pilot for ‘training’ Chinese military
-
Business6 days agoGreggs to reveal trading amid pressure from cost of living and weight loss drugs
-
Sports1 week agoSri Lanka’s Shanaka says constant criticism has affected players’ mental health
-
Sports6 days agoLPGA legend shares her feelings about US women’s Olympic wins: ‘Gets me really emotional’