Analysts predict India will face oil price volatility and macroeconomic effects due to the escalating Iran crisis, though the country's oil supply chain is not yet structurally insecure.
US President Donald Trump indicated the possibility of further military operations against Iran's Kharg Island, a key oil export hub, claiming previous strikes had significantly damaged its infrastructure.
In a post on Truth Social, Trump outlined key goals of the campaign, including degrading Iran's missile capabilities, dismantling its defence industrial base, eliminating naval and air power, preventing Tehran from acquiring nuclear capability, and protecting United States allies such as Israel, Saudi Arabia and the United Arab Emirates.
Trump further alleged that Iran was behind the attacks on three vessels carrying Indian seafarers near the Hormuz Strait, which resulted in the deaths of three, despite the US Central Command having confirmed that the strikes were carried out by American naval forces, calling the incident "totally unacceptable."
Replacing over a third of India's oil imports at competitive rates is going to be a challenge, said traders from State refiners, even though some progress was made in the last two months.
Historically, India was a major buyer of Iranian crude, importing significant volumes of Iranian light and heavy grades due to strong refinery compatibility and favourable commercial terms.
India on Friday launched a highly coordinated, priority operation to safely guide 13 Indian-flagged commercial vessels out of the volatile Strait of Hormuz, the ministry of ports, shipping, and waterways announced on Friday.
Which are the world's most vital straits, important to shipping?
United States President Donald Trump has issued a strong warning to Iran, asserting that any attempt to impede the transit of petroleum through the Strait of Hormuz would be met with massive military retaliation.
A United States missile strike has reportedly hit an educational facility in Khomeyn in central Iran, according to a report by Al Jazeera citing Iran's Mehr news agency. The site was identified as the Dr Hafez Khomeyni School.
The Indian government has increased import duties on gold and silver from 6 per cent to 15 per cent to curb inbound shipments of precious metals amid a rising import bill due to the West Asia crisis.
India's trade with West Asia saw a significant decline of over 28% in April, marking the second consecutive month of contraction. This downturn is attributed to severe shipping disruptions stemming from the ongoing conflict involving the US, Israel, and Iran, particularly impacting the crucial Strait of Hormuz waterway.
Fitch Ratings on Friday said persistently higher oil prices could cause India's retail inflation to rise faster than the expected gradual pace, and lead to a slowdown in economic growth in the first half of financial year 2026-27 (FY27).
Iranian Foreign Ministry spokesperson Esmail Baghaei stated that Iran is instead working with Oman to establish a mechanism for the safe passage of ships through the Strait.
China and Pakistan have jointly proposed a five-point peace plan to address the ongoing conflict in West Asia, focusing on de-escalation and safe passage through the Strait of Hormuz.
'PM Modi is trying to reduce the volume of fuel consumed instead of raising prices sharply.'
India is well-stocked with inventories of crude oil and key petroleum products, including petrol, diesel, and aviation turbine fuel (ATF), to deal with short-term disruptions as the war intensifies in West Asia, Union Minister of Petroleum and Natural Gas Hardeep Singh Puri said on Tuesday.
India's exports experienced their steepest fall in five months, declining by 7.44 per cent in March to $38.92 billion, primarily due to trade uncertainty and geopolitical tensions, with shipments to West Asia contracting by over 50 per cent.
The ongoing conflict in West Asia is severely disrupting Bikaner's food exports, causing delays, rising costs, and impacting the supply of popular snacks like bhujia and papad to Gulf and European markets.
A tanker carrying liquefied petroleum gas (LPG) for India has successfully navigated the Strait of Hormuz and is en route to Visakhapatnam, India, carrying enough cargo to meet half a day's requirement for the country.
Will rising tensions between US-Israel and Iran threaten crude oil supply through the Strait of Hormuz, putting India's fuel prices, imports, and economic stability at risk?
According to the report, the Pentagon is deploying the USS Tripoli ARG, along with the 31st Marine Expeditionary Unit (MEU), part of its own strike group.
India possesses approximately 100 million barrels of commercial crude oil stocks, capable of covering 40-45 days of its requirements if flows through the Strait of Hormuz are disrupted, according to Kpler.
US Secretary of State Marco Rubio said that discussions aimed at halting the conflict with Iran have shown "some slight progress," while simultaneously echoing Washington's dissatisfaction with its NATO allies.
Companies are already diversifying sourcing, raising prices, and reworking operating models as the disruption drags on.
'Historically, India has depended on the Middle Eastern Gulf for nearly 90 per cent of its LPG imports. Shifting to alternative suppliers is not something that can happen quickly.'
Shipments of sunflower oil to India have started normalising after imports from war-torn Ukraine resumed beginning September after a gap of four months, leading to further normalisation of supplies. Ukraine has been the largest supplier of sunflower oil to India. However, after the Russia-Ukraine war broke out in February, supplies from Ukraine dwindled as Russia denied it access to the Black Sea ports.
US President Donald Trump jokingly referred to the Strait of Hormuz as the 'Strait of Trump' while discussing ongoing negotiations with Iran, adding that Iran was under pressure and willing to negotiate.
The government has introduced a mandatory 25-day gap between LPG cylinder bookings due to supply concerns arising from global disruptions and tensions in the Strait of Hormuz. This measure aims to prevent hoarding and prioritise essential non-domestic sectors, while domestic LPG production is being increased to mitigate shortages.
India has capped gold imports under the Advance Authorisation scheme at 100 kg, a day after significantly increasing import duties on precious metals. This move aims to tighten conditions for duty-free gold imports by jewellery exporters and curb non-essential imports amidst a ballooning import bill.
Former US President Donald Trump claimed he stopped a war between India and Pakistan and expressed his desire to be remembered as a great peacemaker.
US President Donald Trump is set to visit China for talks with President Xi Jinping on trade, global issues, and the Gulf war. The visit aims to address trade frictions and other key issues, with high expectations for progress.
China has denied any links to the Iranian cargo ship seized by the US in the Gulf, which allegedly contained chemical materials for manufacturing missiles. The denial follows allegations by former US envoy to the UN Nikki Haley, who claimed the ship was headed from China to Iran.
Iranian Foreign Minister Seyed Abbas Araghchi has warned the United States that Iran is ready to confront American troops if the US launches a ground invasion, calling such a move a potential 'big disaster' for Washington.
China has called on Iran to reopen the Strait of Hormuz and expressed appreciation for Tehran's commitment not to develop nuclear weapons, a key demand of the US to end the conflict.
'So far our production is not affected. But every day the situation prolongs, it does bring risks in terms of shipments getting delayed.'
Sri Lankan President Anura Kumara Dissanayake has announced an economic relief package to mitigate the impact of the West Asia conflict, including fuel price reductions and support from India for petrol and diesel supplies.
India and the US have reported positive progress in recent trade talks in Washington, agreeing to maintain engagement to finalise a bilateral trade agreement, which now requires recalibration following new US tariffs.
India's merchandise exports experienced a slight decrease in February, while imports surged due to increased gold and silver purchases, leading to a widened trade deficit. The West Asia crisis is expected to further impact trade in the coming months.
India has gained the least since Russia invaded Ukraine in February 2022 and was penalised the most, while the US, China and the European Union emerged as the biggest beneficiaries from the war.
