India is starting to experience domestic unrest as the US and Israel fight Iran. A significant portion of India’s liquefied natural gas (LNG) and liquefied petroleum gas (LPG) shipments, as well as over half of its crude oil imports, typically go via the Strait of Hormuz, a small Gulf chokepoint that is currently essentially closed due to the fighting. Beyond oil, India has deeper ties to the area.
A significant portion of India’s foreign accounts is financed by the record remittances that the 10 million Indians who live and work throughout the Gulf send home. In general, India has strong economic ties to the Middle East: according to brokerage company Jefferies, the region provides 55% of India’s crude oil, creates 38% of its remittances, and accounts for 17% of its exports.
A widening war in the Gulf could therefore hit India on several fronts: energy supplies, remittance flows from the diaspora and Delhi’s delicate diplomatic balancing act between Washington, Tehran and the Arab Gulf states. Delhi is cautious for the time being. According to Harsh V. Pant of the think tank Observer Research Foundation, India is “waiting and watching” in the face of growing uncertainty.
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