New Delhi: With rising tensions between Iran and Israel threatening to disrupt global trade through the critical Strait of Hormuz, India is proactively preparing for potential disruptions to its fuel supply and exports. The Commerce Ministry has begun high-level consultations and activated contingency plans to safeguard national economic interests should the vital maritime chokepoint be blocked.
Commerce Secretary Sunil Barthwal convened a key meeting with officials, exporters, and stakeholders on Friday to assess the risks posed by the escalating geopolitical situation in West Asia and its potential impact on India’s trade. The Strait of Hormuz, a narrow but strategically crucial waterway located between Iran, Oman, and the UAE, handles nearly a third of the world’s seaborne oil. Any disruption here could ripple across global energy markets—and hit India hard.
Though the current situation in the region is reported to be stable, sources said the government is leaving nothing to chance. A ship reporting system has been activated to monitor all vessel movements and potential security threats in the area. Additionally, freight and insurance rates—which could spike dramatically in the event of hostilities—are under constant watch.
At the meeting, the Commerce Secretary emphasized the need for continuous assessment of the evolving conflict and its implications for India’s export-import (EXIM) trade. Exporters were urged to be ready with alternative routes for trade, even if they might be less cost-effective, to ensure business continuity.
India is also exploring alternate crude supply routes outside the Persian Gulf in anticipation of any escalation. Officials noted that in a worst-case scenario—if the Strait of Hormuz were to close—India could be forced to temporarily curtail petroleum exports to maintain domestic reserves and ensure uninterrupted oil supply within the country.
Government sources were, however, cautiously optimistic. They pointed out that the Strait of Hormuz has remained operational through multiple global crises over the past five decades. Moreover, with major economic powers like China heavily reliant on the same trade route, experts believe Iran may be reluctant to shut it down, as doing so would alienate key partners.
Still, the Ministry of Commerce is closely monitoring developments and is in coordination with shipping companies, oil refiners, and insurance providers to respond swiftly should the situation deteriorate.
The Strait of Hormuz may lie thousands of kilometers away, but what happens there can directly influence India’s fuel prices, trade flows, stock markets, and broader economic stability. With its comprehensive review underway and emergency plans taking shape, India is aiming to stay ahead of the curve in what could quickly become a global economic flashpoint.
