Can India’s Exports Survive the Middle East Crisis? Reports Say A Big Yes

Can India’s export sector remain steady amid one of the most volatile geopolitical climates in West Asia? So far, all signs point to yes.

Even as tensions flare up between Iran and Israel, and U.S. strikes on Iranian nuclear sites add fuel to an already volatile region, India’s export sector is showing a rare combination of resilience and adaptability. However, FIEO has a measured confidence in Indian Exports. FIEO President, S C Ralhan, says India is not only managing the storm—it’s seizing the opportunity to strengthen its position in global trade.

While global headlines focus on conflict escalation, India’s trade community is working quietly and swiftly behind the scenes—rerouting shipments, managing rising costs, and exploring alternate markets to ensure that exports continue uninterrupted. The message from the ground is clear: Indian exporters have weathered storms before—and they’re ready to do it again.

Middle East Conflict: A Test of Trade Grit

The escalating Iran-Israel conflict has sparked fears of disruption in one of the world’s most crucial trade corridors—West Asia. The region serves as a key artery for global shipping and energy supply, and any prolonged instability could result in ripple effects across international markets. But India is taking the challenge head-on.

FIEO President S C Ralhan, in a recent statement, pointed out that while the conflict presents logistical and financial challenges, it does not fundamentally weaken India’s export story. That’s because India’s trade exposure to Iran and Israel, although significant, represents a small fraction of its overall global trade portfolio.

As per provisional data for FY 2024-25:

• India’s exports to Iran amounted to USD 1.24 billion, largely driven by:

  • Basmati rice: USD 753.2 million

  • Soya meal: USD 70.6 million

  • Banana: USD 53.2 million

  • Bengal gram: USD 27.9 million

  • Tea: USD 25.5 million

• Imports from Iran stood at USD 441.8 million.

Meanwhile, trade with Israel was slightly higher:

• Exports to Israel: USD 2.1 billion

• Imports from Israel: USD 1.6 billion

West Asia: Strategic Yet Manageable

Beyond just Iran and Israel, the larger West Asia region—comprising countries like Iraq, Jordan, Lebanon, Syria, and Yemen—remains deeply important to India’s economic calculus. In FY 2024-25 alone:

• India’s exports to this region totaled USD 8.6 billion

• Imports reached USD 33.1 billion, much of it tied to energy

Despite the obvious reliance, Ralhan suggests that India has built in sufficient safeguards. Whether it’s through diversified sourcing, buffer stockpiles, or alternate sea routes, the country is not sitting idle in the face of risk.

Exporters Adapt, Despite Challenges

One of the key stress points in any regional conflict is the cost of doing business. Rising marine insurance premiums, delays in shipment, longer transit routes, and the unpredictable price of crude oil can weigh heavily on exporters—especially MSMEs.

Sectors like textiles, electronics, and processed food, which are often price-sensitive and time-dependent, may feel the heat. But here too, India’s systems appear robust.

• The RBI’s interventions are helping stabilize inflation and liquidity

• Exporters are being supported through finance facilitation, policy incentives, and improved market access tools

As Ralhan puts it, “Indian exporters have time and again proven their agility. Be it by exploring alternate markets, managing financial risk, or realigning supply chains, the sector has shown remarkable grit.”

Finding Opportunity in Crisis

Interestingly, Ralhan doesn’t see this as just a challenge—but also a strategic inflection point. He believes Indian exporters can turn the crisis into an opportunity by:

• Strengthening regional and global trade partnerships

• Establishing alternate and safer trade routes

• Reinforcing India’s image as a reliable global trading partner

This strategic push aligns with India’s long-term vision to emerge as a major node in global trade, not just as a goods exporter, but as a consistent, crisis-proof player.

What’s Fueling India’s Confidence?

India's growing export resilience is not by accident—it's the result of structural reforms, proactive government support, and a vibrant private sector. Over the past few years, efforts to diversify energy sourcing, expand export finance access, and support MSMEs have created a more stable foundation.

FIEO’s role in this journey is central. From capacity building to policy advocacy and market intelligence, the organisation continues to provide exporters with the tools they need to adapt quickly.

As geopolitical tensions in West Asia continue to evolve, India’s export sector is far from complacent. There is a clear sense of vigilance, preparedness, and cautious optimism. The message from FIEO and its members is that even in uncertain times, the country is committed to keeping the wheels of trade turning.

Ralhan sums it up best:

“Even amid uncertainty, India’s export story is one of resilience, adaptability, and forward-looking action.”

India’s exporters are proving yet again that crisis management is now a core strength. With foresight, flexibility, and firm policy backing, India is not just braving geopolitical storms—it's setting sail stronger.