India has trade relations with both Iran and Israel. This means India buys and sells many goods to and from both countries. So, if a full-fledge war breaks out between them, it will not create problem for the Middle East but India could also feel the heat.
Tensions between Iran and Israel are at their highest peak right now. Both countries are attacking each other with missiles and drones and it seems like a full-fledge war could break out at any time. Thoight India may not be directly involved in the Iran-Israel conflict, but its economy could suffer if things get worse. Therefore, it’s important to understand how it might impact India.
India has trade relations with both Iran and Israel. This means India buys and sells many goods to and from both countries. So, if war breaks out between them, it will not create problem for the Middle East but India could also feel the heat, especially in terms of prices and supply disruptions.
What India buys from Iran
In the past, Iran was one of the biggest suppliers of crude oil to India. But after US sanctions in 2019, India stopped importing oil from Iran. However, India imports liquefied petroleum gas (LPG) and liquefied natural gas (LNG) from Iran, the fuels used in homes and industries.
India also imports dry fruits like almonds, pistachios, and dates from Iran. Along with that, Iranian saffron is considered one of the best in the world, India imports that too. Vegetable products such as gums, resins and lacquers are also imported.
Iran is also famous for its handmade carpets and handicrafts. Besides this, India imports methanol, petroleum bitumen, and other chemicals from Iran, which are used in industries and construction work. It also imports Salt, sulphur, clay, stone, plaster, lime and cement.
What India sells to Iran
Iran is one of the biggest buyers of Indian Basmati, having purchased over 8.55 lakh metric tonnes in 2024–25, worth nearly Rs. 6,374 crore. In strong trade years, Iran has made up 30 to 35 per cent of all Basmati exports from India. On the other hand, India exports several important items to Iran including basmati rice, tea, sugar, medicines, and machinery.
- Rice (Basmati), tea, sugar, and fresh fruits are significant export items.
- A notable quantity of drugs and pharmaceuticals are also exported to Iran.
- India exports various types of machinery, electrical machinery, and electronic equipment to Iran.
- Artificial jewelry, rubber products, and certain chemicals are also part of the export basket.
- Processed minerals are another category of goods that India exports to Iran.
What could go wrong if war breaks out
If the conflict between Iran and Israel turns into a full-blown war, global oil prices could shoot up. That would directly affect India, since we import most of our crude oil from other countries. This could make petrol and diesel more expensive, and when fuel prices go up, the cost of transporting goods also rises. This would lead to higher prices for food, groceries, and daily essentials.
In short, even though the war would be happening far away, its impact could be felt in every Indian household through higher inflation and supply shortages.
