Pulses, rice and staples
Indian kitchens may feel the first pinch from rising pulse prices. “If the war continues beyond a week, the price of pulses will increase,” said Suresh Agarwal, president of the All India Dal Mill Association, speaking to ET. India imports around 5–6 million tonnes of pulses annually — including tur, urad, and lentils — from Myanmar, Canada, and parts of Africa. Any increase in logistics costs could raise landing prices, which would likely push up retail rates and add pressure to food inflation.
Rice exports could see a different effect. The Indian Rice Exporters Federation (IREF) has advised members not to take new CIF (cost, insurance, freight) commitments for Iran and Gulf countries, suggesting that sales be concluded on FOB (free on board) terms to keep freight and insurance risks with buyers.
Dev Garg, VP of IREF, added, “Container and bulk freight could increase sharply at short notice, exposing exporters to losses on fixed delivered-price contracts. The situation may also lead to steep increases in insurance premiums.”
Also Read: West Asia conflict may spike dal prices; rice exports to Iran at risk
India exported goods worth $1.2 billion to Iran in 2025, mainly agricultural products like rice ($747 million), bananas ($61 million), and tea ($51 million), while imports from Iran included petroleum coke ($135.7 million), apples ($71.5 million), and dates ($33.3 million).
Mohit Singla, chairman of TPCI, said, “We expect a surge in demand for rice especially basmati and heavy stockpiling by Gulf countries.” However, uncertainty in logistics is likely to trigger higher transportation costs in the short term.
Onions and fresh produce hit
India’s onion exports to West Asia have stalled after ports shut operations, leaving consignments stranded at origin just as overseas Ramadan demand peaks. West Asia accounts for roughly 15% of India’s onion exports. Domestic prices are already low, around Rs 9–10 per kg, prompting farmer protests in Maharashtra.
Vikas Singh, vice president of the Horticulture Produce Exporters’ Association, said, “In recent weeks, India had become more competitive in the global market and had replaced most of the competing countries in our traditional markets.” Exporters noted that even if ports reopen, demand could remain subdued due to local restrictions and festivities.
Also Read: India’s onion exports to West Asia come to a halt amid escalating tensions
Textiles and garments
India’s garment and textile exports are particularly vulnerable to disruptions in the Strait of Hormuz. Vessels bound for the US and Europe may now need to take the longer route around the Cape of Good Hope, adding 20–25 days to transit. Vijay Agarwal, chairman of The Cotton Textile Export Promotion Council, said, “We will face delays in shipments going to Europe and the USA as the shipping routes would now avoid the Gulf region. It is going to hurt us as we are in the fashion business, which is sensitive to season and timing.”
Tiruppur, producing over 40% of India’s knitted garments, is navigating tight fashion cycles. Raja M Shanmugham, former president of the Tiruppur Exporters’ Association, said, “The orders for April are at various stages; some have been shipped, while some are being manufactured. And any delay in its delivery has financial implications.”
Also Read: Textile export to be hit because of West Asia conflict
Exporters are also concerned about cash flow disruptions, delayed receivables, and discount pressures on off-season garments. KM Subramaniam, president of the Tiruppur Exporters’ Association, warned, “Even Dubai is an important transit hub for our business. The closure of the air space in Dubai would cause significant disruption for the export business.”
Fertilisers at risk
Fertiliser supplies through the Strait of Hormuz may be disrupted, pushing prices higher and raising India’s subsidy bill. A top fertiliser executive said, “If the Strait of Hormuz is closed, fertiliser movement will be restricted, pushing prices up.”
Iran is a major producer of urea and ammonia, crucial for India’s kharif season starting in June. West Asia provides 80% of India’s imported LNG. Deepak Pareek, agricultural consultant, said, “We anticipate urea costs rising by 30–40% as Middle Eastern supply chains tighten, straining both farmer margins and the national subsidy budget.”
Also Read: Fertiliser prices may rise amid rising tensions between Israel and Iran
Despite record domestic production, India imported 8 million tonnes of urea and 5 million tonnes of DAP in the first nine months of FY26, up 85% and 46% year-on-year respectively.
Gems, jewellery, and bullion disruptions
Surat, India’s diamond hub employing about a million workers, could see operations impacted. Kirit Bhansali, chairman of the Gem & Jewellery Export Promotion Council, said, “If the supply of rough diamonds and bullion comes to a halt, then our workers will suffer too as there will be no work for them. Exports to Dubai will also take a beating.”
India cuts and polishes nine out of every ten diamonds globally, making Dubai — a key transit hub for rough diamonds and gold — crucial. In 2025, India imported gold worth $16,476.98 million, up 28.47% from 2024, while rough diamond imports through Dubai were $7,445.12 million. Exports of cut and polished diamonds to Dubai surged 48.81% to $2,394.99 million, and gold jewellery exports rose 25.41% to $6,328.72 million. The India-UAE Comprehensive Economic Partnership Agreement (CEPA) of 2022 has strengthened these exchanges.
Also Read: India staring at likely gold, diamond shortage after US and Israeli strikes on Iran
Gold and silver prices are expected to remain volatile. Jateen Trivedi, VP Research Analyst at LKP Securities, noted, “This elevated geopolitical risk can drive investors toward traditional safe-haven assets like gold and silver, and widely expecting a gap-up opening for bullion markets.”
Electronics and IT exports vulnerable
India’s $4.5 billion electronics exports to the Gulf, largely through UAE, are at risk due to restricted airspace and maritime routes. The UAE imported $4.1 billion in electronics from India in the first nine months of FY26, including $3.1 billion worth of smartphones. Rising sea freight rates and infrastructure risks from missile attacks could disrupt these exports.
The IT sector may also slow. Gaurav Vasu, CEO of UnearthInsight, said, “Global and Indian IT services could slow down to 2–3% for FY27,” lower than prior 4–5% projections, as higher oil prices and geopolitical uncertainty affect enterprise technology budgets in the Gulf.
Also Read: Iran-Israel war: Electronics exports of $4.5 billion at risk
Oil and energy
Crude prices surged after US-Israeli strikes killed Iran’s Supreme Leader, with Brent crude reaching $82.37 per barrel on Monday — the highest since January 2025. Nearly 20% of global oil flows and over 40% of India’s crude imports pass through the Strait of Hormuz. JM Financial noted, “For India, each $1 increase in crude adds roughly $2 billion to the annual import bill.”
Sustained high crude could raise petrol, diesel, and LPG prices, pressure public finances, and influence the fiscal deficit. HDFC Bank highlighted, “Near-term spikes in oil prices could weigh on the currency” and expand the current account deficit.
India’s crude reserves cover roughly 74 days, and alternative sources like Russia and the US offer buffers, but Brent could hit $90–110 per barrel if tensions persist.
The Iran-Israel conflict underscores India’s exposure to West Asia, threatening essential imports, exports, and strategic sectors. From kitchen staples to high-value exports and energy security, the economic impact could be far-reaching if the situation escalates.