[Answered] Amidst the escalating Israel-Iran conflict, examine the multifaceted implications for India’s geopolitical interests, energy security, diaspora, and the challenges in maintaining its foreign policy balance in West Asia.

Introduction

The Israel-Iran conflict’s intensification threatens West Asia’s fragile stability. For India, which has deep strategic, economic, and diaspora ties with the region, navigating this crisis demands a nuanced, multi-pronged foreign policy response.

Geopolitical Balancing Act

India shares strong but distinct ties with both Israel and Iran, necessitating a tightrope walk:

1. Israel is a major defence partner, with arms imports rising from $5.6 million (2015) to $128 million (2024). It also provides surveillance, drone, and radar systems integral to India’s national security.
2. Iran remains crucial for India’s strategic depth in Central Asia through projects like Chabahar Port and the International North-South Transport Corridor (INSTC).
3. India abstained from voting on Gaza-related UN resolutions, avoided SCO condemnation of Israel, and has called for “peace and restraint” without criticising Israel. This illustrates New Delhi’s strategic ambiguity, aimed at balancing G7 alignments and Global South sensitivities.

Energy Security and Trade Vulnerabilities

India imports over 54% of its crude oil from West Asia, much of it via the Strait of Hormuz, through which 40-50% of India’s energy supply flows. If Iran retaliates by closing or disrupting this chokepoint:

1. Crude oil and LNG prices will soar, fuelling domestic inflation.
2. Insurance, freight, and transport costs will rise, weakening India’s export competitiveness.
3. India’s trade with Iran has already shrunk from $14 billion (2017) to $1.4 billion (2023), and with Israel from $11 billion (2022) to $3.75 billion, indicating growing vulnerability in bilateral trade.
4. India’s ambitious India-Middle East-Europe Economic Corridor (IMEC)—announced at the G20 summit—has already stalled due to regional instability. Chabahar’s development may also slow down, hurting India’s ambitions to bypass Pakistan for connectivity to Central Asia and Russia.

Impact on Indian Diaspora and Remittances

The conflict risks the lives and livelihoods of 35,000 Indians in Iran and Israel, particularly 25,000 Indian caregivers and workers in Israel, many of whom replaced expelled Palestinian workers post-October 2023.

1. The Indian government has launched Operation Sindhu to evacuate citizens from both countries.
2. However, repatriated citizens require employment reintegration, or they may return to conflict zones.
3. Disruptions in the wider Gulf region would impact remittances from 10 million Indians in West Asia, which make up nearly 40% of total remittances.

Regional and Multilateral Diplomacy Challenges

India’s perceived pro-Israel tilt—evident from abstentions and distancing from critical statements—has raised concerns among Arab and Islamic countries, where India has deep economic and diaspora stakes.

1. At the upcoming BRICS Summit in Brazil, India must navigate statements from member nations like Iran, UAE, Egypt, and Indonesia, who are likely to criticize Israel.
2. Any shift in India’s stance could affect its soft power, image as a neutral player, and traditional support for the Palestinian cause, which it once led as a NAM founding member and was the first non-Arab nation to recognise Palestine.

Conclusion

India’s strategic, economic, and human stakes in West Asia demand a balanced yet assertive diplomacy. Upholding peace, ensuring diaspora welfare, and safeguarding energy routes are central to India’s long-term regional posture.