If the street of Hormuz is closed by Iran, as is feared, things can deteriorate and the oil stocks of India will also be affected. | Photocredit: Hamad I Mohammed
With the US that entered the Israel-Iran war with its strikes at the most important nuclear locations of Iran, Indian exporters and importers have become more nervous because retriation by Tehran could increase the transit risks in the region and further destabilize the worldwide trade.
The Ministry of Commerce & Industry keeps a close eye on the situation while it is developing and has contact with stakeholders to take appropriate measures when needed, especially if there is a broader regional escalation, a source said the case.
“For India, this is a moment of high effort – which still makes up for its most delicate diplomatic balance acting to protect the core interests and vary from entanglement in a spiral worldwide conflict,” pointed to Ajay Srivastava from Gtri.
Geopolitical developments, such as the American strikes on Iran, have the potential to create uncertainty in global trade, in particular in terms of logistics, insurance costs and regional supply chain disruptions, said Ajay Sahai, director -general, Federation of Indian Export organizations.
“Although it is too early to assess the full impact, such tensions often lead to increased volatility in oil prices, currency movements and shipping routes – all of which are relevant to exports,” Sahai said line.
Development situation
The Commerce department held a meeting with stakeholders on Friday, including shipping companies and air freight operators.
“It is a rapid development situation. Things have become more volatile after the US has entered the war. It is not known what Iran will do in retribution and how things will come out. The government looks closely at developments and has contact with all stakeholders,” the source said.
At the moment there is not much that the government could do with regard to tackling the situation, said Pankaj Chadha, chairman of Eepc India. “We all only hope that the war does not expand,” he added.
Exportors and importers are afraid that the Red Sea route, which is used for connecting with Europe, many African countries and parts of the US, can be influenced by the conflict. If the street of Hormuz is closed by Iran, as is feared, things can deteriorate and the oil stocks of India will also be affected.
Although the trade of India with Iran has fallen to around $ 1.7 billion over the years as a result of the American sanctions on oil and is not very important part of the total trade of the country, New Delhi’s most important concerns is to protect the investment in the port of Chabahar. The port, once fully developed, would offer connectivity with Afghanistan and Central Asia, to bypass Pakistan and help India to develop its ties with the region.
A broader regional escalation could threaten the much larger trade of India with the wider West Asian region – including Iraq, Jordan, Lebanon, Syria and Yemen – where Indian exports a total of $ 8.6 billion and imports at $ 33.1 billion, Srivastava said.
“Any disruption of shipping jobs, port access or financial systems in this corridor would seriously influence the trade flows of India, increase freight and insurance costs and introduce new supply chain risks for Indian companies,” he added.
Published on June 22, 2025
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