Assocham has raised concerns about the potential impact of prolonged regional conflict in West Asia involving the United States, Israel, and Iran on global trade and India’s energy supplies and exports. The organization highlighted India’s close economic ties to West Asian supply chains and its heavy reliance on the Gulf region for exports. West Asia serves as a significant supplier of crude oil, liquefied natural gas (LNG), petrochemicals, fertilizers, and aluminum, crucial for India’s economy.
The ongoing tensions between Israel and Iran pose a risk of disrupting oil and gas shipments passing through the critical maritime chokepoint of the Strait of Hormuz, which accounts for a substantial portion of global oil supply and LNG trade. Assocham pointed out that any prolonged disruption to shipping routes could lead to a rise in global fuel prices, impacting manufacturing and logistics due to the essential role of energy in these sectors. Higher fuel prices could also escalate costs across global supply chains, affecting economic stability.
India’s heavy reliance on imported crude oil makes it vulnerable to international oil price surges, which could widen the current account deficit, fuel inflation, and hinder economic growth prospects. Assocham emphasized the Gulf region’s significance beyond trade, highlighting its role as a hub for the Indian diaspora. The region, particularly the UAE, plays a crucial part in India’s inward remittances, with a substantial share of the Indian workforce employed in various sectors.
Col. Saurabh Sanyal, Secretary General of Assocham, underscored West Asia’s importance as a key supplier of essential commodities to India, with imports in 2025 amounting to approximately $98.7 billion, including energy resources, fertilizers, and industrial inputs. The chamber expressed concerns about the challenges energy-intensive industries may face amid heightened global trade volatility and tariff uncertainties, impacting trade predictability and long-term business confidence. Disruptions to maritime routes in the Gulf have already caused delays in container shipments worldwide.
The conflict in West Asia could have implications for sectors such as gems and jewelry, pharmaceuticals, electronics, petroleum products, and agricultural goods, given India’s trade relationships with the region. Assocham highlighted reports of containers stuck at Indian ports being redirected for domestic sales due to shipment disruptions. Additionally, the organization welcomed the government’s initiative to establish an Inter-Ministerial Group (IMG) for Supply Chain Resilience to monitor developments in Iran and the wider region, evaluating their impact on India’s trade.
