Impact of Iran-Israel Conflict on India
Relevance:
GS Paper II – International Relations
Background
- Long-standing tension between Israel and Iran has escalated sharply.
- On June 13, 2025, Israel launched strikes on Iranian nuclear facilities, assassinating top Iranian generals.
- Iran responded with ballistic missile attacks on Israeli military sites.
- The conflict threatens regional stability in West Asia (Middle East)—a vital area for India in terms of energy, trade, remittances, and geopolitical influence.
India’s Diplomatic Stand
- Neutral and cautious approach:
- PM Modi spoke to Israeli PM Netanyahu: urged peace and stability.
- EAM Jaishankar spoke to both Iranian and Israeli foreign ministers: stressed dialogue and diplomacy.
- India avoided criticism of Israel, did not condemn the strikes.
- India distanced itself from the SCO statement that condemned Israel and abstained from the UN vote calling for a ceasefire in Gaza.
Impact on Indian Nationals
- Around 25,000 Indians in Israel, and 10,000 in Iran (students, professionals, workers).
- MEA launched Operation Sindhu to evacuate citizens.
- Iran opened airspace for evacuation flights.
- Government is also exploring rehabilitation and employment options for returnees to prevent re-migration into conflict zones.
Economic Impact
- Trade
- With Iran:
- Trade dropped from $14 billion (2017) to $1.4 billion (2024) due to US sanctions.
- With Israel:
- Trade dropped from $11 billion (2022) to $3.75 billion (2024).
- Defence imports increased: from $5.6 million (2015) to $128 million (2024).
- Energy Security
- Major concern: Closure of Strait of Hormuz:
- Vital shipping lane for 40–50% of India’s oil and LNG imports.
- Would result in:
- Increased oil & gas prices.
- Higher shipping insurance and freight costs.
- Rise in import bills, inflation, and trade deficit.
Geopolitical Implications
- Balancing Global Alliances
- The West (U.S., G-7): backs Israel; sees Iran as destabilizing.
- The Global South and BRICS: more sympathetic to Iran.
- India risks alienating Gulf partners, especially if seen as pro-Israel.
- Upcoming BRICS Summit in Brazil
- Iran, UAE, Egypt, Ethiopia, Indonesia (new members) may push for anti-Israel resolutions.
- India will find it hard to maintain neutrality or dissociate from BRICS positions.
- Strategic Infrastructure Impact
- India-Middle East-Europe Economic Corridor (IMEC):
- Already derailed due to October 7 conflict.
- Needs stable Arab-Israeli connectivity.
- Chabahar Port (Iran) and International North-South Transport Corridor:
- May face setbacks if Iran is destabilized or isolated.
Remittances and Diaspora Impact
- West Asia accounts for:
- 40% of India’s remittances.
- 54% of oil imports.
- Trade worth over $170 billion.
- Any perception of India shifting away from Arab solidarity could impact the large Indian diaspora and bilateral goodwill.
Conclusion
India faces a multi-dimensional challenge due to the Israel-Iran conflict:
- Needs to protect its citizens, energy interests, and strategic projects.
- Must balance diplomatic neutrality with geopolitical realism.
- An early resolution to the conflict is in India’s best interest for regional peace, economic stability, and connectivity goals.
Mains Question
Discuss the implications of the escalating Israel-Iran conflict on India’s foreign policy, energy security, and regional connectivity ambitions. How can India navigate this complex geopolitical scenario?
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