by Sri Varshith Kumar Reddy E
The West Asia war is not India’s war, at least, not in the diplomatic cables New Delhi sends. In the ledgers of its farmers, exporters, and migrant workers, it reads differently.
India has long prided itself on what its foreign policy establishment fondly calls “strategic autonomy,” the art of being everyone’s friend and no one’s combatant. The US-Israeli strikes on Iran on February 28, 2026, have delivered a sharp lesson: in a globalised economy, neutrality does not buy immunity. A nation can stay out of every war and still pay the bill. The reckoning now is about how deeply, through which arteries, and over what timeline.
The Strait That Strangles
Begin where any honest accounting must, with the crude oil. Around 50 per cent of India’s monthly oil imports, approximately 2.6 million barrels per day, now transit the Strait of Hormuz, up from 40 per cent in November-December 2025. India’s crude dependence on the Gulf deepened in the very months leading up to this escalation, as New Delhi stepped back from Russian oil and returned to traditional Gulf suppliers.
A sustained blockade of the Strait remains economically suicidal for the Gulf states themselves. Cold comfort, when oil tankers are already avoiding the passage and Brent crude climbed to $82.40 a barrel on Monday, its highest in 14 months, in the first trading session after the strikes. For India, the arithmetic is unsparing. Higher crude prices widen the current account deficit, weaken the rupee, and compress the government’s capacity to spend on everything from infrastructure to welfare. There have already been enough warning signals of inflationary pressure on Asian oil importers.
India does have options. Saudi Arabia’s East-West pipeline and the UAE’s Abu Dhabi Crude Oil Pipeline, both designed to bypass Hormuz, could provide some relief, and New Delhi is accelerating purchases from alternative suppliers while drawing on strategic petroleum reserves. These are prudent contingency measures, though they reveal the structural anxiety at the heart of Indian energy security. The country has diversified enough to hedge, and remains too exposed to simply walk away.
Rice, Tea, and the Farmer Who Waited
The conflict’s footprint extends well beyond oil, into the grains and gardens that sustain large parts of rural India. Basmati rice offers the starkest illustration. In 2024-25, India exported six million tonnes of basmati rice worth nearly Rs 50,000 crore, with roughly 50 per cent destined for five West Asian countries: Saudi Arabia, Iran, Iraq, the UAE, and Yemen. India’s exports to Iran alone were worth $1.2 billion in 2025, with rice accounting for $747 million of that figure.
Those shipments are now stuck. Vessels bound for Bandar Abbas, Iran’s largest port, have been held up, and wholesale basmati prices have already risen 10 to 15 per cent over the past month. For the rice belt of Punjab and Haryana, the crisis arrives as a waiting game on payments that may or may not come, on orders that may or may not survive.
Tea tells a sharper story still. India achieved record exports of 280.4 million kg in 2025, a 9.5 per cent jump on the previous year, driven significantly by demand from Iraq, Iran, and the UAE. West Asia consumes around 90 million kg of Indian tea annually, 35 per cent of total tea exports, and the orthodox trade with Iran has already been suspended, with shipments worth Rs 100-150 crore halted. Assam and West Bengal, whose plantation economies sustain hundreds of thousands of workers, are fully exposed to what happens a few thousand kilometres away in the Zagros Mountains.
The Price of a Longer Voyage
Military conflict in West Asia has a well-documented tendency to punish exporters who have nothing to do with the fighting. Disruptions to the Bab-el-Mandeb Strait and the Red Sea, a pattern established during the Houthi campaign in 2024, have forced vessels onto the Cape of Good Hope route, adding up to 20 days of transit time. Freight costs have risen 40 to 60 per cent, and insurance premiums for war-risk coverage have climbed 15 to 20 per cent.
The Federation of Indian Export Organisations has warned that the conflict will raise freight costs and stretch supply chains, with the West Asia and North Africa region accounting for 31 per cent of India’s export-import cargo. A study by the Atlas Institute of International Affairs places the total value of Indian exports at risk at US $244 billion. Textiles, electronics, and cut-and-polished diamonds sectors, which barely recovered from earlier disruptions, are among the most exposed, and for the thousands of small and medium enterprises anchoring India’s export economy, with thin reserves and thinner margins, the clock runs fast.
Dalal Street Feels the Tremor
The market verdict on March 2, 2026, morning was swift and severe. The Sensex crashed over 2,700 points at open on Monday, before trimming losses to end roughly 1,000 points lower; the Nifty slipped below the 24,700 mark. Investors wiped out approximately Rs 8 lakh crore in market capitalisation in a single session. Oil marketing companies, aviation stocks, paint and tyre manufacturers, and chemical firms all fell in unison, their fortunes tied to a crude price over which they have no influence.
Foreign Institutional Investors offloaded equities worth Rs 7,536 crore on February 27, 2026, alone, while Domestic Institutional Investors absorbed the selling with purchases of Rs 12,292 crore. The divergence between FII selling and DII buying captures the moment precisely, with global capital moving toward safe havens, and Indian domestic investors are being asked to hold the line. Infrastructure firms with large West Asia order books face a separate anxiety. L&T, which recorded order inflows of Rs 3,56,631 crore in FY25 with significant Gulf exposure, saw its stock fall 7.5 per cent intraday on March 2, as markets priced in the possibility that Gulf capex programmes could slow or stall under wartime conditions.
The Invisible Transfer
India’s most underexamined exposure to the conflict arrives quietly, in millions of bank accounts across Kerala, Tamil Nadu, Uttar Pradesh, and Rajasthan in the form of remittances. India received a record $135.46 billion in inward remittances in FY 2024-25, with the Gulf accounting for 38 per cent of that sum. The UAE alone contributes nearly half of the Gulf share.
A war spreading from Iran into the broader Gulf would threaten the livelihoods of millions of Indian workers and the household incomes their transfers sustain. India’s trade statistics carry this as a single line item. Behind it are the children in school in Malappuram, the house being built in Lucknow, and the debt being repaid in Rajasthan. The people who made none of the decisions that produced this conflict is absorbing most of its consequences.
The Moral Arithmetic of War
Economic analysis, however rigorous, eventually exhausts itself. It can quantify what a barrel of crude costs when Hormuz is blockaded, and what a million kilograms of orthodox tea is worth when the buyer’s country is on fire. It struggles to account for what civilisations owe to those drawn into conflicts without consent.
India, for all its ambitions of Vishwaguru and Viksit Bharat, occupies a middle station that is powerful enough to aspire, and exposed enough to suffer. The fires lit in Tehran and Tel Aviv observe none of the cartographical courtesies of non-alignment. They travel through tanker routes and commodity floors, through the rupee’s daily depreciation and the delayed arrival of a money transfer in Thrissur.
Economies are built with extraordinary patience and effort, precisely to make war unnecessary. Every suspended cargo, every unpaid invoice, every farmer waiting on a basmati order that has gone quiet is a small ledger entry in a calculus that no combatant drew up. History has always known this. The tragedy is that history has never much cared.
(The author is a pracademic working on government policy and public institutions. Ideas are personal.)
