As US-Israeli strikes on Iran pull West Asia into open conflict, global attention has fixed on the geopolitical risks. For India, the stakes are just as high, and far more concrete. New Delhi's exposure across energy, trade, investment, remittances, and diaspora makes it one of the most economically vulnerable nations outside the region itself. India, however, has been measured in its public statements, but the numbers tell a more urgent story.

Oil Dependency Remains Structural

India still gets a large share of its crude oil supplies from West Asia, even after its efforts to diversify. Close to $50.8 billion of India's crude oil supplies, amounting to 48.7% of the total crude supplies, was sourced from West Asia in 2025.Roughly half of India's crude oil imports, around 2.6 million barrels per day, transited the Strait of Hormuz in FY25, primarily from Iraq, Saudi Arabia, the UAE, and Kuwait. Gulf suppliers collectively made up close to 46% of India's crude imports during the same period.

Such exposure translates into disruptions caused due to issues such as the blocking of shipping routes, an increase in insurance costs, or a rise in prices directly impacting India via the fuel price channel and the CAD. Approximately half the oil imports to India in FY26 (April to December) came from West Asia. This is an indication of the vulnerability that the country is exposed to despite the fact that it imports over 85 to 88 percent of its crude oil.

Trade Flows Are Deeply Interlinked

West Asia serves as both a supplier and a growing buyer for India. The region’s share in India’s global goods exports has risen steadily, reaching around 20% in recent estimates. Agri-food exports illustrate this clearly, with West Asia absorbing about 21.8% of India's $11.8 billion in such shipments in 2025.

Basmati rice stands out as particularly exposed. Iran, Saudi Arabia, Iraq, the UAE, and Yemen together account for nearly half of India's basmati export market. Middle Eastern buyers account for more than half of total shipments, with exporters estimating that there are about 400,000 tonnes stuck in the conflict. The exports help farmers in key states and small industries such as jewelry and gems, which also depend on Gulf markets.

Investment Ties Could Face Freeze

Gulf capital has become a reliable source for India’s growth. The UAE has been a major contributor to foreign direct investment inflows, with significant equity flows funding infrastructure, technology, and real estate. West Asia collectively accounts for roughly 10% of India’s total FDI equity inflows in tracked periods, with the UAE dominating the share.

Remittances: A Direct Household Impact

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