How Will Middle East Tensions Affect India’s Economy?

New Delhi: The growing instability in the Middle East could soon impact Indian households, agriculture, and industries. Rising tensions in West Asia may disrupt India’s imports of energy, fertilizers, industrial raw materials, and diamonds, according to a report by the Global Trade Research Initiative (GTRI).

In 2025, India imported goods worth $98.7 billion from West Asia. The largest share of these imports was petroleum and LNG.

Nearly $70 billion worth of petroleum imports came from this region. Out of this, $50.8 billion was crude oil, which accounts for 48.7% of India’s total crude oil imports.

India currently has oil reserves for about 30 days, but if tensions in the Middle East continue to rise, fuel prices in the domestic market may increase.

Higher fuel prices could affect several sectors, including transportation, logistics, and agriculture.

The report also highlights concerns about fertilizer imports. In 2025, India imported fertilizers worth $3.7 billion from West Asia. Any disruption in supply could reduce fertilizer availability in the country and affect the agriculture sector.

India’s diamond industry is also heavily dependent on imports from the Gulf region. In 2025, the country imported rough diamonds worth $6.8 billion from West Asia.

Due to the instability in the region, the diamond industry is also facing concerns over possible supply disruptions.