Israel Iran War: India maintains a close tab, but the trade is not affected now

India continues to monitor the influence of the ongoing conflict between Israel and Iran with concerns about the decisive strait of hormone, which can turn into a major difference in global trade, especially for raw oil.

According to the sources, the Ministry of Commerce also requested inputs from various ministries as well as stakeholders on whether they face any effect of the ongoing war. On Monday, the Minister of Commerce, Sonil Bartawal, said that the administration will meet the shipping lines and container societies to assess the impact of the conflict.

However, India’s trade with both Israel and Iran is still limited. As for India, the trade of commodities such as grains, eating fruits, gemstones, jewelry and ceramic products can be affected by the ongoing conflict between Israel and Iran.

Currently, India is still relatively affected as trade continues along the hormonal strait. “As of now, there is no problem with the Strait of Hormuz. If this is affected, this will be affected until it is trading along the Red Sea and the Suez Canal,” said Ajay Sahai, General Manager and CEO of the Federation of Indian Export Organizations (FIEO).

He also made it clear that there is a major impact on air charging so far and shipping has not been affected. But as the war is intensified, the war risk risk is to rise from about $ 50 to $ 200 per container to $ 200 to $ 400 per container. The general insurance premium may also rise, and if oil prices intersect $ 100 a barrel, there may be additional fees for exports.

Any siege in the Strait of Hermoz will lead to a sharp rise in global crude oil prices. Low crude oil prices have been in recent months as an India’s comfort with inflationary pressure under control, and the long increase can enlarge in inflation not only crude oil but also other commodities. Currently, officials emphasize a sufficient space to absorb any sharp rise in global crude oil prices.

India is the third largest importer of crude oil in the world and imports 80 % of oil requirements. Crude oil does not import directly from Iran due to US sanctions.

“India is still vulnerable to high oil prices, although the ability to withstand high prices financially above today. Until then, the rise in oil prices for a longer period will eventually leak into inflationary expectations and expectations, and there is an impact on monetary policy,” said a report issued by Emkay Global Financial Services.