Archive · 23 Jun 2025
India's Trade Faces Uncertainty Amidst Hormuz Conflict
The conflict between Iran and Israel could cause big changes for India's trade.
If the waterway called the Strait of Hormuz is blocked, it might hurt India's fuel and oil imports, but it could also give Indian companies a chance to sell fuel to Europe at better prices.
India exports Basmati rice to Iran and although some shipments are stuck, the yearly export volume may remain the same.
The government is keeping a close eye on how much it costs to ship things, because a closed Hormuz could make prices go up.
Potential disruption of the Strait of Hormuz (SoH) due to the Israel-Iran conflict may create opportunities for Indian refiners.
India's refined exports are not overwhelmingly reliant on the SoH, but European markets could offer better prices.
Indian Basmati rice exports to Iran might equal last year's levels despite some shipments being stranded.
The Indian government is monitoring shipping rates due to concerns about the SoH possibly closing.
A SoH closure could severely impact India's energy security and increase inflationary pressures.
- Who
- Indian refiners, exporters, government, and stakeholders.
- What
- The ongoing conflict between Iran and Israel is affecting India's trade.
- When
- As of June 23, 2025, and the immediate preceding weeks.
- Where
- India, Strait of Hormuz, and related global markets.
- Why
- Due to potential disruptions to shipping routes and market shifts caused by the Israel-Iran conflict.
Industry Impact
Government Action
Profitability Concerns
Industry Impact
Indian exporters fear delays, potentially impacting profitability.
Government Action
Rising crude prices due to regional conflict may offset margin gains for refiners.
Shipping Concerns
Industry Impact
Shipping disruptions and potential closures of SoH
Government Action
Stable shipping rates currently.
- SoH Dependency (India Crude Imports)
- 60-65%
- Basmati Exports to Iran (2024-25)
- 0.86 million tonnes (mt)
- Basmati Rice stranded
- 100,000 tonnes
- Basmati export realization from Iran (2024-25)
- $881/tonne
