• Source:JND
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US-Iran War: The intense war between the US-Israel and Iran entered its 11th day, showing no sign of ending the armed conflict that impacted trade through sea routes, specifically, the state of Hormuz. In a fresh provocation, US President Donald Trump threatened Iran that it would strike Tehran '20 times harder' if it attempts to block the Hormuz, a key passage for trade. On the other side, Tehran, after selecting its new Supreme Leader, Mojtaba Khamenei, said the fate of the war will be decided by it only. The war, which was waged with the engagement of three nations - the US, Israel and Iran - has now spread almost entirely across the Gulf region. The spiral nature of the war is now affecting other countries, including India.

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The first point of impact has been higher oil prices, which rose above USD 110 per barrel.

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Here Are The Key Sector Which Are Set To Be Affected:

  • Energy Sector: The disruption to trade through the Strait of Hormuz and the stoppage of gas supplies are having a more immediate impact on Indian businesses. The oil and gas supplies have been affected due to the Gulf War, spreading fear of inflation in the oil prices in India. If the crisis continues, the energy sector will bear the brunt of the impact. People in India may see an increase in the cost of power generation and fuel.
  • Inflation: The domino effect of war can spark a chain reaction, triggering far-reaching consequences on the market. With a disruption in the supply of imported products, inflation may rise. A price hike in the transport sector will make almost everything costly. We know inflation affects every sector, and it also affects GDP growth. The stock market also sees a decline if inflation rises.
  • Immigrant Workers: The safety of millions of Indians working in Gulf countries is also a matter of concern. States like Kerala and Bihar, which receive a huge amount of money from Indians working in the Gulf, will be affected.
  • Agriculture: The agriculture sector will be affected as the supply of fertiliser faces the heat due to the ongoing war. Shortage of fertilisers will impact agricultural production, increasing the costs of farming and food items.
  • Industries: Indian industries such as the automobile, electronics, diamonds and steel get several raw materials from other countries that pass through the Indian Ocean. If supply drops, these sectors will see disruption in production, which may increase inflation and layoffs.

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