There is no sign of the tension between Iran and Israel reducing. On the other hand, India is suffering losses on the global trade front. Exporters say that logistics costs have already become very high even before the increase in conflict in the West Asian region. Now if it becomes more severe, business in crude oil, electronics and agriculture sectors may be harmed. He said that the insurance cost for exports to countries directly involved in the war may also increase, which will impact the working capital of Indian exporters.
Research institute Global Trade Research Initiative (GTRI) said the conflict is already hurting India's trade with countries like Israel, Jordan and Lebanon. Federation of Indian Export Organizations (FIEO), a leading organization of exporters, said that the Iran-Israel conflict has the potential to significantly impact world trade and the global economy in many ways. FIEO Director General Ajay Sahay said that Iran is a major trader in the oil market. Any escalation in conflict could disrupt oil supplies, leading to higher prices, which would impact the global economy, especially those dependent on oil imports. Oil prices have already increased by four dollars per barrel.
He said increased tensions could lead to instability in West Asia, affecting trade routes such as the Strait of Hormuz, through which a significant portion of the world's crude oil passes. Sahay said that due to disruptions, shipping costs and delays may increase. Many global supply chains depend on the stability of West Asia. The conflict could disrupt transportation and logistics, affecting industries ranging from electronics to agriculture. Furthermore, if the Western world imposes sanctions or trade restrictions, it will further complicate global trade.
Hand Tool Association Chairman SC Ralhan said that the orders given to these countries will be stopped and gradually doing business in this sector will become very risky and difficult. Ralhan said that the insurance cost will increase or we may not get any insurance coverage in that area. During January-July, 2024, India's trade with countries directly affected by the conflict faces significant challenges. GTRI founder Ajay Srivastava said that there has been a huge decline of 63.5 percent in Israel's exports. Due to this, a decline of 38.5 percent was seen in Jordan and a decline of 6.8 percent in Lebanon.
The Israel-Hamas conflict, which started in October 2023, has now spread to Lebanon, Syria and indirectly affecting Jordan and Iran. India's exports to Israel during April-July in the current financial year stood at $639 million. In the year 2023-24 it was worth 4.52 billion dollars. Imports from Israel during the first four months of the financial year were worth $469.44 million. In the year 2023-24 it was worth two billion dollars. India's exports to Iran during April-July in this financial year were worth 53 crore 85.7 lakh dollars. In the year 2023-24 it was worth 1.22 billion dollars. During the first four months of this financial year, imports from Iran were worth 14 crore 6.9 lakh dollars. In the year 2023-24 it was worth 62 crore 51.4 lakh dollars.
Similarly, during April-July this financial year, the country's exports to Jordan were worth 22 crore 85.6 lakh dollars. In the year 2023-24 it was 1.46 billion dollars. During the first four months of this financial year, imports from Jordan were worth 69 crore 92.8 lakh dollars. In the year 2023-24 it was worth 1.4 billion dollars. During April-July this financial year, India's exports to Lebanon were worth 11 crore 68.6 lakh dollars. In the year 2023-24 it was worth 34 crore 49.1 lakh dollars. During the first four months of this financial year, imports from that country were worth 39 million dollars. In the year 2023-24 it was worth 113 million dollars.
Major items of India's exports to West Asian countries include basmati rice, man-made yarn, fabrics, gems and jewellery, cotton yarn and fabrics. India is Israel's second largest trading partner in Asia. However, bilateral merchandise trade is mainly dominated by diamonds, petroleum products and chemicals. Recent years have seen growth in trade in sectors such as electronic machinery and high-tech products, communication systems and medical devices.
