There are no signs that tensions between Iran and Israel will ease. On the other hand, India is suffering losses on the global trade front. Exporters say logistics costs were already very high even before the escalation of conflict in the West Asia region. Now, if it worsens, businesses in the crude oil, electronics and agriculture sectors could be harmed. He said the cost of insurance for exports to countries directly involved in the war may also increase, which will affect the working capital of Indian exporters.
loss to the global economy
Research institute Global Trade Research Initiative (GTRI) said the conflict is already hurting India’s trade with countries such as Israel, Jordan and Lebanon. The Federation of Indian Export Organizations (FIEO), a leading exporters’ organisation, said the Iran-Israel conflict has the potential to significantly impact world trade and the global economy in many ways. FIEO Director General Ajay Sahay said Iran is a major trader in the oil market. Any escalation of the conflict could disrupt oil supplies, leading to higher prices, which would affect the global economy, especially those dependent on oil imports. Oil prices have already increased by four dollars a barrel.
India faces losses here
He said rising tensions could cause instability in West Asia, affecting trade routes such as the Strait of Hormuz, through which a significant portion of the world’s crude oil passes. Sahay said that due to disruptions, shipping costs and delays may increase. Many global supply chains depend on the stability of West Asia. The conflict could disrupt transportation and logistics, affecting industries ranging from electronics to agriculture. Furthermore, if the Western world imposes sanctions or trade restrictions, it will further complicate global trade.
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Increased cost of insurance
Hand Tool Association president SC Ralhan said that orders given to these countries will stop and gradually doing business in this sector will become very risky and difficult. Ralhan said the cost of insurance will increase or we may not get any insurance coverage in that area. During January-July 2024, India’s trade with countries directly affected by the conflict faces significant challenges. GTRI founder Ajay Srivastava said there has been a whopping 63.5 percent drop in Israel’s exports. Due to this, a 38.5 percent decrease was observed in Jordan and a 6.8 percent decrease in Lebanon.
India’s trade with Israel and Iran
The conflict between Israel and Hamas, which began in October 2023, has now spread to Lebanon, Syria and indirectly affects Jordan and Iran. India’s exports to Israel during April-July of the current financial year amounted to $639 million. In the year 2023-24 it was worth 4.52 billion dollars. Imports from Israel during the first four months of the financial year amounted to $469.44 million. In the year 2023-24 it was worth two billion dollars. India’s exports to Iran during April-July of this financial year amounted to Rs 53 crore and $85.7 lakh. In the year 2023-24 it was worth 1.22 billion dollars. During the first four months of this financial year, imports from Iran amounted to Rs 14 crore and $6.9 lakh. In the year 2023-24 it was worth Rs 62 crore and $51.4 lakh.
India’s trade with Jordan and Lebanon
Similarly, during April-July of this financial year, the country’s exports to Jordan amounted to Rs 22 crore and $85.6 lakh. In the year 2023-24 it was 1.46 billion dollars. During the first four months of this financial year, imports from Jordan amounted to Rs 69 crore and $92.8 lakh. In the year 2023-24 it was worth $1.4 billion. During April-July of this financial year, India’s exports to Lebanon amounted to Rs 11 crore ($68.6 lakh). In the year 2023-24 it was worth Rs 34 crore and $49.1 lakh. During the first four months of this year, imports from that country amounted to 39 million dollars. In the year 2023-24 it was worth $113 million.
What does India export to West Asian countries?
The main items of India’s exports to West Asian countries include basmati rice, synthetic yarns, fabrics, gems and jewellery, cotton yarns and fabrics. India is Israel’s second largest trading partner in Asia. However, bilateral merchandise trade is mainly dominated by diamonds, petroleum products and chemicals. Recent years have seen trade growth in sectors such as electronic machinery and high-tech products, communication systems and medical devices.
