Wars in West Asia rarely remain distant events for India. The ongoing confrontation involving Iran, Israel and the United States is a reminder that instability in the Persian Gulf can travel quickly into the Indian economy ~ sometimes all the way into household kitchens. The first signs are already visible. Domestic LPG cylinder prices have been raised by Rs 60 across India, pushing up the cost of cooking fuel used by millions of households.
The increase reflects tightening global energy markets as shipping routes and supply chains around the Strait of Hormuz come under threat. At the same time, the government has sought to reassure the public that petrol and diesel prices will not rise immediately, signaling that New Delhi intends to absorb part of the shock rather than pass it to consumers. That distinction reveals the scale of India’s exposure to developments in the Gulf. India imports roughly 90 per cent of the crude oil it consumes, and a large share of that supply travels through the Strait of Hormuz, the narrow waterway between Iran and Oman that carries about a fifth of the world’s traded oil.
Any disruption in that corridor can quickly ripple through global markets. Even relatively small increases in crude prices translate into higher transportation costs, inflationary pressure and fiscal stress for governments. New Delhi has tried to cushion such risks by diversifying its suppliers. Purchases of discounted Russian crude surged after Russia’s invasion of Ukraine in 2022, allowing India to keep domestic fuel prices relatively stable. Yet the strategy has limits. Shipping disruptions in the Gulf still affect energy markets worldwide, and India’s supply chains remain tightly connected to the region. Natural gas and LPG present a sharper vulnerability.
India’s rapid expansion of LPG usage ~ promoted by government programmes encouraging cleaner cooking fuels ~ has dramatically increased dependence on imports. Much of that supply originates in Gulf countries such as Qatar, Saudi Arabia and the United Arab Emirates. Unlike crude oil, LPG has limited strategic storage, meaning disruptions can reach consumers more quickly. Energy, however, is only part of the equation. Nearly 10 million Indian citizens live and work across the Gulf Cooperation Council states. Their remittances ~ sent home from cities such as Dubai, Doha and Riyadh ~ form a crucial pillar of India’s external finances, bringing billions of dollars into families across Kerala, Uttar Pradesh and other states each year.
A prolonged regional crisis could affect employment, wages and migration flows. Strategic projects are also at stake. India’s investment in Iran’s Chabahar port was designed to open a trade corridor to Afghanistan and Central Asia while bypassing Pakistan. Yet US sanctions on Tehran and rising geopolitical tensions have repeatedly complicated that ambition. Prime Minister Narendra Modi’s government now faces a delicate balancing act: maintaining relations with Israel, the Arab Gulf states and Iran while safeguarding India’s economic interests. The unfolding crisis is a reminder that for a country so deeply integrated with the Gulf, distant wars are rarely distant for long.