Virendra Pandit
New Delhi: The spiraling impact of Sunni terror group Hamas’ surprise and all-out invasion of Israel from the Gaza Strip since October 7, which has so far claimed nearly 1,200 lives and left thousands wounded and homeless, reflected on market sentiment when share prices fell as soon as the bourses opened on Monday.
The rising US interest rate concerns after strong jobs data and a surge in oil prices because of the fresh military conflict in the Middle East weighed heavily on the sentiment. NSE Nifty 50 and S&P BSE Sensex were down 0.7 percent. Barring information technology (IT), all the other 12 major sectoral indexes logged losses.
The escalating Israel-Palestine war could further affect Indian trade, diplomacy, and remittances from the Middle East where nearly nine million Indians work and remit around USD 100 billion per annum, experts said on Monday.
In view of these unforeseen developments, India is treading carefully. “Deeply shocked by the news of terrorist attacks in Israel. Our thoughts and prayers are with the innocent victims and their families. We stand in solidarity with Israel at this difficult hour,” Prime Minister Narendra Modi said on Saturday via a social media post on X.
Meghalaya Chief Minister Conrad Sangma said at least 27 persons from the northeastern state visiting Christian holy sites in Bethlehem, Israel, are “stuck” because of the grim situation.
So far, neither Iran nor the Arab world has gotten involved in the Hamas-Israel conflict although the terrorist outfit is trying to rope in Iran-supported Shia terror group Hezbollah based out of Lebanon to expand the war zone.
According to officials, India may need to do a tight-rope walking if these new players in the Gulf Region also get sucked into the deadly conflict.
New Delhi’s trade with Tel Aviv, which was nearly USD 10.7 billion in 2022-23, may also be seriously impacted if shipping operations at the three largest ports of Israel–Haifa, Ashdod, and Eilat–are disrupted.
These ports handle shipments of agricultural products, chemicals, electronics, machinery, and vehicles. India’s merchandise trade with Israel depends mostly on the Eilat port on the Red Sea.
India is currently making an effort to bring back its stranded students and citizens from Israel, Union Minister of State for External Affairs Meenakshi Lekhi said on Sunday. The Indian Embassy in Tel Aviv has asked Indian nationals in Israel to remain vigilant and observe the safety protocols of local authorities.
If the conflict does not stop soon and escalates further, it may not just hit India’s trade with Israel, especially in critical items such as defense equipment, but also pose a serious challenge to New Delhi’s diplomatic efforts in the volatile region.
Also, any progress on the proposed India-Middle East-Europe Economic Corridor, announced in September during the G-20 Summit in New Delhi in September, may also be delayed if the war drags on.
According to experts, India’s energy supply, economy, investment, and welfare of expatriates could also be affected if the Middle East loses its stability.