- Wednesday, February 26, 2025
While India would be worried over the safety of its strong diaspora in rthe region in the wake of the conflict, it would also keep a close watch on its economic interests.
By: Shubham Ghosh
AT a time when the global economy is already facing several challenges from the war in Ukraine that will complete two years in February unless stopped before, the sudden eruption of a strife in the Middle East following Hamas’s surprise attack on Israel which has now turned into a war raised more concerns across the planet.
The consequences of the renewed war between two old foes are also relevant for India and according to political commentator Pranay Sharma, it not only puts India’s economic cooperation with Israel under stress besides the welfare and safety of the nine-million strong Indian diaspora in West Asia. He said the instability also threatens a region which is a source of key fuel such as oil and gas to the south Asian nation and their prices could be impacted.
Sharma, who wrote a piece on the matter for Moneycontrol, said signs of a rise in oil prices are already visible and if they shoot up in the near future, the result could be more inflation in India and in other places.
On Monday (9), India’s oil minister Hardeep Singh Puri said his government was keeping a close watch on the conflict situation in Israel.
Deeply shocked by the news of terrorist attacks in Israel. Our thoughts and prayers are with the innocent victims and their families. We stand in solidarity with Israel at this difficult hour.
— Narendra Modi (@narendramodi) October 7, 2023
Indian prime minister Narendra Modi’s post on X stating solidarity with Israel in the wake of the attacks from Hamas shows how significant the Middle Eastern nation is for New Delhi. Modi has grown close with his Israeli counterpart Benjamin Netanyahu who returned to power last December and the Indian leader’s quick tweet suggested that New Delhi is ready to stand by Israel which has extended support to India in the past.
But the test for Indian foreign policy also lies over its stand on the Palestinian demand for a homeland.
Sharma wrote in his piece, “Though there is unlikely to be any dilution on India’s tough stand against terrorism in West Asia, a more nuanced stand is likely to emerge from South Block as the dust begins to settle. However, for the moment the focus of New Delhi is on how the situation is panning out in a region that is closely linked to India’s growth and development.”
Trade between India and Israel stood at $10.1 billion in the current year, excluding the defence, said the Indian external affairs ministry. Israel is a major arms provider to India and defence cooperation between the two nations has increased over time since normal diplomatic relations between them were established in 1992 when PV Narasimha Rao was the prime minister of India.
Sharma opined that while there is little possibility of the conflict affecting oil supply in the Gulf nations, the chance of a steep rise in oil prices remains a concern for India as well as the international fraternity.
He also said the proposed India Middle East Europe Economic Corridor, a multi-billion project announced during the G20 summit in New Delhi last month to link India with the Middle East and Europe as a possible counter to China’s Belt and Road Initiative, could now face an uncertain future.
The expert also raised questions over the future of the I2U2 initiative that involves India, Israel, the US and the UAE. The inaugural business forum under the mechanism held in Abu Dhabi, the UAE, in February this year emphasised on potential tie-ups in areas such as food security, energy, water, space, health, transport and others but with the plans might face a hurdle, even if temporary, after the latest clash broke out.
