As it was already a week of Israel - Iran conflict, the government of India has decided to bring back Indian citizens from Israel and Iran fearing a further escalation. Isreal launched strikes on Iranian nuclear installations, assassinated top generals, and bombed several important cities across the country.
India being a peace-loving country, emphasized its concern over the early restoration of peace and stability to both Israel and Iran. Further the Indian external affairs minister Mr. S. Jaishankar expressed his deep concern of the international community at the turn of events.
India while making no criticism of Israel for striking, it disassociated from a statement of the Shanghai Cooperation Organization (SCO) that includes China, Russia, Iran, Pakistan, Belarus and Central Asian Countries that condemned Israel's aggression. In a break from older position, New Delhi has made it clear that India will not criticise Israel.
How does it affect the Indian economy and trade?
India has been slowly decreasing the trade level with both the countries over the years due to the tensions in the region. After India bowed to Trump administration's demand on oil trade, its trade with Iran dropped from about $14 billion in 2017 to $1.4 billion last year. Similarly, it has reduced its trade with Israel from $11 billion to $5.6 billion last year. However, where India will feel the pinch financially, is in trade route disruption, especially if the "Strait of Hormuz" is closed as a result of the tension.
This closure may sharply increase the Oil and LNG price, given that 40-50% of India's energy imports come through this region. Shipping costs, Security and insurance premiums will also rise. With the current crisis, India's investment in Chabahar port and the international North-South corridor for trade and connectivity to Afghanistan, Central Asia and Eurasia will be affected, and New Delhi's best hope is an early end to the conflict.
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