{"id":"f-73cd9b4b27-c1964624-395d-50e6-adbf-b2abb62267c8","title":"India’s economic vulnerabilities amid US-Iran war: Inflation, GDP risks explained","description":"Crude oil prices has spiked due to Middle East conflict, threatening global supply, particularly via Strait of Hormuz. India, a major importer, faces significant economic fallout. The surge impacts import bills, current account deficit, inflation, and GDP growth. Remittances, trade, and key sectors like aviation and manufacturing are at risk from sustained high prices.","timestamp":1773052792,"category":"business","headline":"India’s economic vulnerabilities amid US-Iran war: Inflation, GDP risks explained","modifiedHeadline":"How US-Iran War Could Hit India’s Economy","subCategories":["scid_edbc7f13"],"subcategoriesName":["Economy"],"region":"IN","bundleMetaData":{"bundleId":"7b48871c-c993-4956-b43d-6f46f8e1b036","bundleTitle":"Today In India","cardData":null},"iabCategoryId":"86","fcSummary":"crude oil prices surged near $120 per barrel due to the us-iran conflict, raising concerns about energy supply disruptions and impacting global markets. india, a major crude importer, faces potential supply crises, rising import costs, and a widening current account deficit. increased prices could also fuel inflation, reduce gdp growth, and pressure the rupee, affecting remittances and trade with gcc countries.","summary":"US-Iran conflict sends oil prices soaring, threatening India's economy with inflation, GDP risks & trade disruptions. Looming supply crisis.","ctaUrl":"https://trends.glance.com/newz/astrology/IN/en/news9/f-73cd9b4b27-c1964624-395d-50e6-adbf-b2abb62267c8","sourceUrl":"https://www.news9live.com/business/economy/indias-economic-vulnerabilities-amid-us-iran-war-inflation-gdp-growth-risks-explained-2940980","bannerImage":"https://g-mob.glance-cdn.com/public/fc/image/j2IqFMWknxT0.webp","content":"

New Delhi: Crude oil prices jumped spiked near $120 per barrel before falling back $112.98 on Monday as the US-Israel and Iran war intensified, threatening

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oil and gas production and shipping in the Middle East. The financial markets across the globe also faced the heat of rising crude.

With several Gulf countries halting oil and gas production, plus the disruptions at the Strait of Hormuz, has led to increasing worries about the energy supplies. In a report, SBI Research said that increasing prices of crude oil, disruptions in oil supply routes, and potential impacts on remittances and trade could play a matter of concern for India.

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Rising crude impact on India’s GDP, Inflation

India is the third largest importer of crude in the world as it purchased about 88% of its crude oil requirements. Notably, of the total imports, India’s 5.5 million barrels of oil per day passes through the Strait of Hormuz. Thus, if the disruption continues for long, India could face a supply crisis and a sharp rise in import costs.

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Twenty per cent of the world’s total crude oil passes through this strategic waterway, located north of Iran, is the narrow sea route. In December 2025, the price of Brent crude was around $58.92 per barrel in, which jumped to $70.75 per barrel by the end of February 2026. If crude oil prices rise $1 per barrel, India’s import bill surges by about Rs 16,000 crore.

According to the report, every $10 per barrel increase in crude oil prices could increase India’s current account deficit (CAD) by about 36 basis points.

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The rising crude oil prices could also result in a spike in cost-push inflation, raising Consumer Price Index (CPI)-based inflation by about 25–40 basis points. This could lead to loans becoming expensive, leading to higher EMIs.

If oil prices don’t dwindle down soon, India’s economic growth could be hit. According to the report, every $10 per barrel increase in crude oil prices could reduce India’s GDP growth by about 20–25 basis points. If crude oil reaches $130 per barrel, India’s GDP growth rate in FY2027 could decline from the estimated 7% to around 6%.

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The foreign remittances which India receives could be impacted. India received about $138 billion in personal remittances in 2025, while it was $131.9 billion in 2024. About 18% of these remittances come from GCC (Gulf Cooperation Council) countries.

The Middle East crisis has also hit Rupee. Rising crude oil prices could put further pressure on the rupee in the short term.

India’s trade with West Asian countries could face a heavy blow if the US-Iran war continues. GCC countries account for more than 15% of India’s total exports and over 16% of imports.

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How Rising Crude Oil Prices Affect Indian Industries

The prices of petrol and diesel could spike as when crude oil prices increase, the costs of oil marketing companies jump as import cost higher prices. This can put pressure on oil companies’ their margins and profits.

The raw materials could become expensive if Crude oil continues to be on the higher side, ultimately leading to rise in final end products.

The tire industry is also dependent petrochemical-based raw materials. Thus, the crude oil prices rise could impact the production costs, leading to higher prices.

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The Aviation sector is also expected to be hit as aircraft fuel prices are linked to crude oil. When oil becomes expensive, airlines’ operating costs increase.

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India’s economic vulnerabilities amid US-Iran war: Inflation, GDP risks explained

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