The Iran-Israel Escalation: Implications for India in a World on Edge
As the spectre of a full-scale war between Iran and Israel looms large over West Asia, the tremors of this potential conflict are being felt far beyond the region. For India—a nation with strategic, economic, and demographic stakes in the Middle East—the ramifications are not merely hypothetical. The escalating confrontation threatens to redraw the region’s geopolitical contours, imperil energy security, disrupt trade, and trigger socio-political reverberations at home.
The recent missile exchanges between Iran and Israel mark a dangerous new phase in a shadow war that has spanned decades. What was once limited to covert operations, cyber warfare, and proxy militias has now spilled into open hostilities. With the April 2024 Iranian missile barrage on Israeli military targets, followed by an Israeli airstrike deep into Iranian territory, the risk of a direct, prolonged conflict between the two regional powers has become a tangible reality.
This is no longer a localised conflict. The United States, a long-standing ally of Israel, has pledged unwavering support for its security. Iran, meanwhile, is backed—strategically and, at times, militarily—by Russia and China. Proxy groups from Lebanon to Yemen have already entered the fray. The danger of the conflict metastasizing into a broader regional war is very real. For India, the second-largest importer of crude oil and home to nearly nine million Indian citizens working in the Gulf, this is an alarming development.
Energy Security Under Threat
India’s most immediate vulnerability lies in its energy dependency. Nearly 60% of India’s crude oil imports come from the Middle East, with Iraq, Saudi Arabia, and the UAE as major suppliers. Iran, despite Western sanctions, has also returned as a marginal player in India’s oil basket through indirect trade. A war that engulfs Iran, disrupts the Strait of Hormuz, or destabilises oil-producing nations will inevitably cause a sharp spike in global oil prices. For an economy already grappling with inflationary pressures, this could have devastating consequences.
Brent crude has already touched $100 per barrel in anticipation of prolonged instability. If the conflict widens or persists, India may be forced to dip into its strategic reserves, reconfigure its energy supply chains, and increase subsidies to prevent domestic fuel prices from spiralling. The fiscal strain could derail budgetary commitments and force a re-evaluation of economic priorities, especially with general elections around the corner.
Indian Diaspora and Evacuation Concerns
Another immediate concern is the safety of the Indian diaspora. Millions of Indian workers—particularly in the UAE, Saudi Arabia, Oman, Kuwait, Bahrain, and Qatar—could find themselves in a warzone if the conflict spreads. These workers are not only vital to the economies of host countries but also contribute over $100 billion annually in remittances to the Indian economy.
During the 2006 Lebanon war and the 2015 Yemen conflict, India launched large-scale evacuation missions such as “Operation Raahat.” If the current escalation leads to a regional conflagration, the Ministry of External Affairs may be forced to prepare for one of the largest evacuation operations in its history. Coordinating such a mission across multiple volatile zones would be a logistical and diplomatic challenge of immense scale.
Impact on Trade Routes and Strategic Investments
The Iran-Israel conflict could also disrupt India’s westward trade routes. The Strait of Hormuz and Bab el-Mandeb strait—both chokepoints critical to global oil and cargo movement—are susceptible to closure or militarisation. The Houthis in Yemen, aligned with Iran, have already targeted commercial vessels. If shipping lanes through the Red Sea and the Persian Gulf become inaccessible or insecure, Indian exports to Europe and Africa could face delays, higher insurance premiums, and reduced competitiveness.
Moreover, the Chabahar Port project in Iran—a strategic asset for India to bypass Pakistan and access Afghanistan and Central Asia—now sits under a cloud of uncertainty. Chabahar is not merely a commercial venture; it is a geopolitical counter to China’s Belt and Road Initiative and Pakistan’s Gwadar port. A destabilised Iran may force India to reassess or postpone its investments and strategic footprint in the region.
Diplomatic Tightrope for New Delhi
Perhaps the most complex implication lies in the diplomatic arena. India shares cordial ties with both Iran and Israel. Israel has been a key defence partner, supplying advanced weaponry, surveillance systems, and cooperating on counter-terrorism. Iran, on the other hand, remains critical to India’s energy needs, connectivity ambitions, and regional balance—especially in dealing with the Taliban-led Afghanistan.
Taking sides overtly in this conflict would undermine India’s delicate balancing act. Remaining silent, however, may not suffice in a polarised global environment where strategic ambiguity is increasingly untenable. The West may pressure New Delhi to condemn Iranian aggression, while the Global South may expect India to champion de-escalation and resist Western military adventurism. Any misstep could cost India diplomatic capital in either bloc.
India’s best course may be to lead calls for restraint at multilateral forums like the G-20, the SCO, and the UN while preparing for the practical consequences of war. It must advocate for regional dialogue, backdoor diplomacy, and humanitarian corridors—all while projecting itself as a neutral, stabilising power.
Domestic Repercussions and Political Optics
The war may also inflame sectarian and political tensions within India. In a country with significant Shia and Sunni populations, as well as growing political polarisation, the Iran-Israel conflict could become a flashpoint for internal discord. Communal tensions may be exacerbated by propaganda, social media disinformation, or perceived biases in government positioning.
The government would be wise to pre-empt such developments through proactive communication, community engagement, and surveillance of digital misinformation. At a time when general elections are approaching, the ruling party must be cautious not to let foreign policy be weaponised for domestic political gain.
A Case for Strategic Autonomy
Ultimately, the crisis underlines the urgent need for India to double down on strategic autonomy. It must accelerate its clean energy transition, diversify oil imports—including reviving stalled projects in Venezuela and Africa—and fast-track investments in green hydrogen and solar energy. Reducing reliance on unstable oil corridors is no longer a climate imperative alone—it is a matter of national security.
India must also rethink its regional engagement. While balancing ties with Israel and Iran, it must invest in multilateral diplomacy to prevent the Middle East from slipping into a prolonged cold war—or worse, a hot one. Quiet diplomacy, aided by historical goodwill, may give India a niche role as a mediator trusted by both sides.
The Iran-Israel escalation is a turning point for West Asia—and a stress test for Indian foreign policy. As oil prices climb, evacuation plans are dusted off, and trade routes face peril, India must respond not with rhetoric, but with resilience and foresight. In this moment of global crisis, the true test of Indian diplomacy lies in protecting national interests without compromising strategic principles. It is a fine line to walk, but one that New Delhi must master if it wishes to emerge as a credible global power in the multipolar world ahead.