Why is it in the news?
The US–Israel conflict with Iran has disrupted global supply chains affecting energy and trade flows.
The crisis exposes India’s vulnerabilities in energy imports, fertilizer supply and external trade.
Category: Economy
Important Points:
● India imports over 85% of its crude oil and a large share of Liquefied Natural Gas (LNG) from Gulf countries.
● Major suppliers include Saudi Arabia, Iraq, UAE and Qatar, making India highly dependent on West Asian energy routes.
● The Strait of Hormuz is a crucial oil transit chokepoint through which much of India’s oil and LNG imports pass.
● India’s Strategic Petroleum Reserves currently store about 5.33 million metric tonnes of crude oil.
● Rising crude prices (around 15% increase) could increase imported inflation and widen the Current Account Deficit.
● India is the second-largest LPG consumer in the world with about 60% of LPG demand met through imports.
● India’s underground LPG storage capacity is about 1.4 lakh tonnes, sufficient for less than two days of consumption.
● Around USD 11.8 billion worth of India’s food and agricultural exports to West Asia are at risk due to the conflict.
● India has around one crore diaspora in GCC countries sending about USD 51 billion annually in remittances.