How Military Tensions in West Asia Could Push Millions in India into Poverty

A recent UN report warns that escalating military tensions in West Asia could lead to a significant rise in poverty levels in India, affecting over 2.5 million people. The report highlights the broader implications for human development across Asia and the Pacific, including increased food insecurity and economic disruptions. As India prepares for the Kharif cropping season, the timing of these challenges is critical. The findings underscore the urgent need for adaptive measures to mitigate the impact on vulnerable populations and ensure long-term resilience in the face of ongoing geopolitical tensions.

By Narendra Chaudhary Apr 14, 2026, 11:58 IST

UN Report Highlights Economic Risks from West Asia Conflict

United Nations: The ongoing military tensions in West Asia are projected to thrust approximately 2.5 million individuals in India into poverty, as indicated by the latest estimates from the United Nations.

According to a report from the United Nations Development Programme titled 'Military Escalation In The Middle East: Human Development Impacts Across Asia And The Pacific', the conflict is exacerbating human development challenges throughout Asia and the Pacific.

The report highlights that rising fuel, freight, and input costs are eroding household purchasing power, increasing food insecurity, straining public finances, and undermining livelihoods.

The preliminary findings, released on Tuesday, suggest that globally, around 8.8 million people are at risk of falling into poverty, with the military escalation in West Asia potentially costing the Asia-Pacific region up to USD 299 billion.

In India, the number of individuals living in poverty is expected to increase from about 400,000 to 2.5 million, according to the report.

The global poverty figures due to the conflict are estimated to rise from approximately 1.9 million to nearly 8.8 million, with South Asia bearing the brunt, accounting for a significant portion of this increase.

China is projected to see a more modest rise in poverty, with estimates suggesting an increase from around 115,000 to over 620,000 individuals.

The report emphasizes that in the most severe scenario of a 28-day conflict followed by an 8-month adjustment period, India's poverty rate could escalate to 24.2% from 23.9%, affecting nearly 2.5 million people. Post-crisis, approximately 354 million individuals are expected to live in poverty compared to 351 million before the crisis.

The UNDP's simulation also assesses the impact on the Human Development Index (HDI) across the region, predicting a decline in Iran's HDI equivalent to one to one and a half years of human development progress.

India is expected to lose about 0.03-0.12 years of HDI progress, while Nepal and Vietnam are projected to experience similar declines.

The report notes that India relies heavily on imports for its oil needs, sourcing over 90% of its oil and more than 40% of its crude from West Asia, which also supplies over 45% of its fertilizer imports.

The conflict's repercussions are influencing energy strategies in various nations, with rising LNG prices prompting countries like India, Thailand, and Vietnam to increase their dependence on coal.

Trade and supply chain disruptions have been significant, affecting 25 out of 36 countries due to freight surcharges and delayed deliveries.

India's trade with West Asia constitutes 14% of its exports and 20.9% of its imports, with non-oil exports valued at approximately USD 48 billion, particularly in sectors like basmati rice and gems.

The report also highlights food security challenges, noting that countries like India, Pakistan, and Bangladesh may face compounded pressures due to remittance losses from reduced Gulf economic activity.

In India, the timing of these disruptions is critical as they coincide with the Kharif cropping season preparations, with current urea stocks providing a temporary buffer.

The report further discusses the impact on remittances and migrant workers, emphasizing India's significant exposure to Gulf labor markets, with millions of Indians residing in GCC countries.

The military escalation is disrupting employment and livelihoods across the Asia-Pacific region, particularly affecting sectors reliant on imported energy.

In India, small and medium enterprises in sectors like hospitality and construction may face increased costs and supply shortages, leading to job losses and reduced working hours.

Additionally, raw material costs for medical devices are expected to rise significantly due to disruptions in the Strait of Hormuz, with wholesale medicine prices already increasing.

Despite these challenges, there are opportunities for countries to enhance long-term resilience through adaptive social protection and diversified energy systems, according to UN Assistant Secretary General Kanni Wignaraja.