Impact of Ongoing Middle East Conflict on India's Exports

Concerns Over Economic Impact

New Delhi: The ongoing conflict in the Middle East poses a significant threat to India. A prolonged situation could have detrimental effects on India's global exports. Even if the conflict resolves quickly, its repercussions could linger for months or even years. Rajesh Aggarwal, the Secretary of Commerce, issued this warning on Saturday.

During a press conference in Hyderabad at the 'Chintan Shivir - Pharma Export Growth' event, Aggarwal noted that the crisis in the Middle East has already impacted both imports and exports last month. This is primarily due to energy being a crucial component of India's import market.

India's Export Statistics to the Region

Aggarwal stated, 'The Middle East is a vital market for us, accounting for approximately 12-13% of our exports. Therefore, any disruption will directly affect this sector. If the situation persists, it could also impact our exports to other parts of the world, as some value chains may take time to normalize. We are aware of this.' He added that the true impact of the crisis will become clearer in the coming weeks.

Government's Response to the Crisis

Aggarwal explained that the government is working to minimize the impact on supply chains, although some decline in both imports and exports is expected. He emphasized that even if the conflict ends, its effects could last for several months or years, depending on which supply chains or infrastructure are affected.

According to Aggarwal, to tackle these challenges, the industry must strive for self-reliance. He also mentioned that the pharmaceutical sector has been impacted, particularly concerning the supply of essential raw materials and chemicals.

He noted that the government is prioritizing the distribution of limited LPG availability across various sectors and is exploring imports from alternative sources if necessary.