West Asia Conflict Puts India's Energy And Supply Chains at Risk
The Strait of Hormuz, one of the world's most critical energy routes is now under serious threat. For India, the consequences are immediate
Missile and drone strikes across the Gulf between March 1 and March 3 have hit energy terminals, LNG plants, fuel depots and port infrastructure in Saudi Arabia, Qatar, the UAE and Oman. The Strait of Hormuz, one of the world's most critical energy routes is now under serious threat. For India, the consequences are immediate.
In 2025, India imported $98.7 billion worth of goods from West Asia. These are not discretionary imports. They are the building blocks of the economy — crude oil for refineries, gas for fertiliser plants and kitchens, rough diamonds for Surat's polishing hubs, limestone for cement, copper for power grids.
Oil and Gas
The sharpest exposure is in petroleum. India imported $70 billion worth of petroleum crude and products from West Asia in 2025, of which $50.8 billion was crude oil — nearly half of all crude imports. With domestic stocks covering only 30 days of consumption, prolonged shipping disruptions would quickly push up fuel prices, raise transport costs and feed inflation. Farmers would feel it through higher diesel prices for irrigation and tractors.
LNG is equally at risk. India sourced 68.4 per cent of its LNG imports from West Asia, spending $9.2 billion in 2025. The disruption has already begun — Qatar's Petronet LNG halted supplies to GAIL from March 4 citing restrictions on vessel movement. LNG powers fertiliser plants, gas stations and city gas networks supplying CNG and piped cooking gas to households.
LPG, the primary cooking fuel for millions, faces the same pressure. India imported $13.9 billion worth from the region — nearly half its total LPG imports — with only about two weeks of stock cover.
Food and Farming
India imported $3.7 billion worth of fertilisers from West Asia in 2025, covering nearly a third of its NPK and nitrogen needs. Disruptions during the crop season could reduce yields, increase subsidy costs and push up food prices.
Industry and Construction
Polyethylene, used in packaging and agricultural films, was 35.6 per cent sourced from the region. Limestone — 68.5 per cent from West Asia — is critical to cement production. Sulphur, essential for fertilisers and chemicals, had a 65.8 per cent regional import share. Copper wire, direct reduced iron for steel and gypsum carry similarly high dependencies. India's $6.8 billion rough diamond import, 40.6 per cent from West Asia, feeds directly into export industries employing hundreds of thousands in Gujarat.
The Broader Risk
If disruptions through the Strait of Hormuz extend beyond a week, the effects will move fast, from energy markets to fertilisers, from construction materials to export industries. What begins as a regional conflict could rapidly become a supply shock across the Indian economy.
