Iran-Israel conflict: Economic impact on India

NEW DELHI: The impact of ongoing tension between Iran and Israel is being felt all over the global economy, including India. As the two nations have deep ties with India, an emerging conflict between the two can put pressure on the country’s energy needs and trade activities.

“India’s trade problems due to shipping disruption in the Red Sea could get worse because of the new conflict…The conflict makes situation in West Asia unstable, forcing projects like the IMEC Trade corridor to remain on paper for a long time,” said Ajay Srivastava, founder, GTRI. On April 1, Israel bombed Iranian consulate in Damascus, killing Iranian officials. In response, Iran launched strikes on Israel on April 13, escalating the Iran–Israel proxy conflict to a direct conflict. Since then, a possible retaliation by Israel is keeping the global economy on its toes.

Impact on markets

For India, the biggest impact of the turmoil is being felt on its stock market. In the first four sessions since tension escalated, India’s equity market benchmark indices, BSE Sensex and NSE Nifty, declined by 3% each.