Middle East tensions threaten India-Iran trade ties, disrupt exports and travel

Mangaluru: Escalating tensions between United States and Iran have sparked global concern, with potential ripple effects on India’s import-export business. India shares a long-standing trade relationship with Iran and relies significantly on sea routes passing through Iranian waters for cargo movement.

Any disruption in these maritime channels could severely impact India’s overseas trade. Several countries — including Nepal, Australia, New Zealand, India, South Korea, Russia, Sri Lanka, Mongolia, the Philippines, and Indonesia — depend on maritime routes near Iran to transport goods to markets such as England, the United States, Brazil, Mexico, Canada, Sweden, Ireland, and Gulf nations.

If Iran were to impose a complete ban on its sea routes, the immediate fallout would be felt in global shipping, particularly affecting imports and exports. For the past six months, war clouds hovering over the Middle East have posed serious challenges to Iran’s shipping and logistics sector.

The impact is not limited to Iran alone but extends to trading partners like India. Economic sanctions imposed by the United States and other nations on Iran have already complicated international banking transactions, insurance coverage for shipments, and access to spare parts and technological upgrades for vessels.

India primarily imports crude oil, petroleum products, gems, gold jewellery, electronics, machinery, organic chemicals, steel, plastics, and dates from countries including Iran and Gulf nations.

In return, India exports refined petroleum products, jet fuel, diamonds, gold ornaments, pharmaceuticals, automobile components, small cars, cotton textiles, handloom products, ready-made garments, rice, coffee, dairy products, footwear, and home décor items.

A prolonged maritime blockade could disrupt supply chains, raise freight costs, and delay deliveries. Meanwhile, tensions have had immediate effects on travel and hospitality sectors in coastal Karnataka.

Following reported attacks near Kuwait International Airport, authorities in Kuwait issued safety advisories, using siren signals to communicate public safety updates. Though normalcy has reportedly returned, uncertainty has led to flight cancellations.

In Mangaluru, several tourists bound for Gulf countries remain stranded in city hotels due to cancelled international flights. Pilots and cabin crew scheduled for overseas travel are also staying back. In one instance, around 50 guests from Dubai were unable to attend a wedding in the city after their flight was cancelled at the last minute.

Local hotel businesses and airport catering services have also suffered losses as food supplies prepared for international flights were halted abruptly. With geopolitical uncertainty persisting, stakeholders fear that prolonged instability in the region could deal a significant blow to India’s trade and travel sectors.

Also Read: Israel-Iran war: All flight cancel for these countries till March 6