India watching Iran-Israel conflict closely amid growing fears over trade and energy risks

“India’s stakes are high. Depending on how the crisis unfolds, India may be forced to make certain choices,” said Harsh V Pant, vice-president of studies and foreign policy at the Observer Research Foundation.

“Trade and energy security are top priorities. If the conflict worsens, the lives of Indian citizens and economic security will be affected,” Pant warned.

Analysts say India’s swift calls for de-escalation following the drone strikes, as well as Foreign Minister Subrahmanyam Jaishankar’s phone calls to both his Iranian and Israeli counterparts, demonstrate how concerned New Delhi is about the situation.

At a public event on Monday, Jaishankar stressed the government’s concern over “an enormously sensitive region” and urged calm. “I’m only saying that for the rest of the world and definitely for India, we would like to find ways of de-escalating the situation,” the Indian minister added.

India, the world’s third-largest oil consumer and home to 1.4 billion people, imports over 80 per cent of its oil from the Middle Eastern countries to meet domestic demand. Given its low strategic oil reserves, which could last between one and three months, its energy import requirements are both vast and urgent.

India’s trade ministry said it would refrain from policy interventions for now over the Israel-Iran conflict, opting to wait and assess the situation further.

According to analysts, several Indian interests are at stake should the conflict escalate further, with instability in the Red Sea posing a particular concern. The seizure of a cargo vessel with Indian sailors near the Strait of Hormuz by Iran’s Revolutionary Guards on April 13 underscored the impact on Indian interests.

A female crew member, Ann Tessa Joseph, was released