NEW DELHI, 24 JUNE 2025
WHILE geopolitical tensions in the Middle East, including the ongoing Iran-Israel conflict, pose particular challenges to global trade dynamics, the Federation of Indian Export Organisations (FIEO) said on Monday that India’s export sector remains resilient and adaptive.
While important, the country’s trade with Iran and Israel constitutes a small share of the overall export-import basket.
“The government and industry are jointly monitoring developments to ensure minimal disruption,” FIEO President S.C. Ralhan said.
“We anticipate some short-term impact on demand and logistics, particularly in the Gulf region, a crucial hub for Indian exports. Increased shipping costs, longer transit times, and rising marine insurance premiums may add pressures,” Mr Ralhan said, especially in price-sensitive sectors.
However, exporters have repeatedly demonstrated agility in rerouting shipments, diversifying markets, and managing financial exposure.
Rising Oil Prices and Shipping Threats
A wider Middle East conflict is expected to impact oil supplies from Saudi Arabia, Iraq, Kuwait and the UAE, leading to a sharp spike in oil prices. Shipping could also get hit as Yemen’s Houthi rebels have already warned that they would resume their attacks on ships if the US attacked Iran.
MSME Strength and Government Support Back India’s Trade Stability
Indian imports would remain resilient from potential economic shocks due to vibrant MSME, large-scale exporters, and a strong government.
Due to the contemporary Middle East crisis, the government is closely watching crude oil prices, as volatility in these prices can impact inflation and logistics costs. However, India’s diversified supply chain and the Reserve Bank’s proactive stance help maintain liquidity and macroeconomic stability.
