India is proactively shielding its economy from the escalating conflict in the Middle East, particularly regarding oil and gas supplies and the safety of Indian workers in the region. The Indian government established a panel to manage risks and maintain smooth export and import operations. Furthermore, officials have been reviewing petroleum reserves to ensure sufficient buffer stocks and have directed state-run refineries to diversify their crude oil sources away from West Asia. This strategic move aims to mitigate the impact of external geopolitical pressures on India's economy.
The ongoing conflict in the Middle East, including the 2026 Iran war, has significantly disrupted global energy markets, with the closure of the Strait of Hormuz causing Brent crude prices to surge past $120 per barrel in March 2026. This disruption also led to QatarEnergy declaring force majeure on all its exports, affecting major Asian economies including China, Japan, India, and South Korea, which collectively account for 75% of oil and 59% of LNG exports from the region. India, heavily reliant on the Middle East for nearly 60% of its petroleum imports and $125 billion in annual remittances, has felt the economic impact, including a decline in remittances and rising energy costs.
Despite the challenges, India has shown resilience. While other countries faced severe fuel shortages and states of emergency, India's sufficient reserves helped it navigate the crisis, albeit with panic buying. The US Treasury even granted India a temporary 30-day emergency waiver in March 2026 to purchase stranded Russian oil cargoes, helping stabilize domestic fuel prices. The conflict has also triggered a significant reverse migration of over 220,000 Indian nationals from the Gulf Cooperation Council region and Iran, including skilled professionals and business owners, contributing to a 14% growth in secondary real estate markets in India.
