India’s Export Sector Braces for Short-Term Impact from Iran-Israel Conflict: FIEO

New Delhi, June 23: On Monday, the Federation of Indian Export Organisations (FIEO) flagged potential short-term disruptions to India’s export operations due to the ongoing conflict between Iran and Israel, particularly affecting the Gulf region — a vital conduit for Indian trade.

Gulf Region Logistics and Demand Under Pressure

FIEO warned that the intensifying hostilities in the Middle East could affect both demand and logistics, especially in the Gulf countries, which serve as key transit points for Indian exports. The conflict, now involving direct participation by the United States, has raised fresh concerns among exporters.

“Increased shipping costs, longer transit times, and rising marine insurance premiums may add pressure, especially in price-sensitive sectors,” said FIEO President S C Ralhan.

Oil Volatility and Economic Safeguards

Ralhan also pointed to the volatility in crude oil prices, which has the potential to drive up inflation and shipping expenses. However, he noted that India’s diversified energy procurement strategy and the Reserve Bank’s proactive approach are helping sustain macroeconomic balance and liquidity in the system.

Strategic Adaptation and Long-Term Opportunities

Despite the immediate challenges, FIEO emphasised the resilience of India’s export sector. “This situation presents an opportunity for Indian exporters to explore alternate routes, bolster regional partnerships, and reinforce India’s role as a dependable global trade partner,” Ralhan said.

He also noted that India’s trade volumes with both Iran and Israel form a relatively small portion of its total foreign trade, adding that the government and industry are closely monitoring the situation to mitigate any serious fallout.

In conclusion, while the Iran-Israel conflict may introduce short-term headwinds, India’s export ecosystem remains equipped to adapt swiftly and sustain its global momentum.

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