India’s Commerce Ministry is open to remedial steps to limit any fallout on trade due to to a potentially prolonged conflict between Israel and Iran.
“We are in touch with export promotion councils, container companies, shipping firms and other line ministries. Based on that we do internal analysis and if it is prolonged (the Israel-Iran conflict) then we will see what steps may need to be taken. If any remedial measures are needed, the government is open, but it will depend on how the situation plays out,” Commerce Secretary Sunil Barthwal said on April 15.
On April 13, Iran fired over 300 drones and missiles at Israel, calling the attack a retaliation to a strike earlier in the month on its consulate in Syria that resulted in casualties among the Islamic Revolutionary Guard Corps (IRGC).
Following the attack, Tel Aviv said it would retaliate and “extract a price from Iran”.
Explaining the nature of measures that could be embarked upon if the need arises, Barthwal cited the steps taken by the ministry to protect exporters from the impact of the Red Sea crisis ranging from asking export promotion councils to not raise rates of insurance to urging the finance ministry to maintain credit flow amid disruptions in the route.
Since the outbreak of the Israel-Hamas war in October, the Red Sea has been in the news for periodic attacks by Houthi rebels of Yemen on commercial vessels passing through the Suez Canal, a crucial choke point for global maritime commerce. A unanimous impact of the Houthi attacks has been the rise in overall shipping costs for the world and India.
Barthwal said that India is used to regional conflicts, adding that if these conflicts had not been there “we would have done even better on goods exports. Our strategy to diversify helped our exports do better.”
A wider conflict in West Asia is concerning for India that imports over 80 percent of its crude requirements. A rise in oil prices is expected to push up the South Asian nation’s import bill.
Beyond that, tensions in the Strait of Hormuz can also become a headache for India given that it is a crucial choke point for oil trade. Iran’s military forces seized a cargo vessel in the vicinity of the Strait of Hormuz earlier on April 13 amidst flaring tensions in the region.