India, as Prime Minister Narendra Modi has hinted, is on the verge of an emergency-like situation, requiring high alert and concerted action, as a consequence of the Iran-US-Israel war. The war nearing a month since it began on February 28 has seriously disrupted supply chains due principally to the curbs on movement of ships through the Strait of Hormuz. The blockade to the main trade route has seriously affected supply of petrol, diesel, LPG gas and fertilizers, as the PM has testified in his speech on Tuesday. It is generally understood that the impact of this war, which is unlikely to have an early end, will have a lasting adverse impact on the global economy; and India and China, with their large production lines, would be hard-hit. An increase in the prices of fertilizers is bound to hurt the agriculture sector, where small and medium level farmers are already struggling hard to recover their investments vis-à-vis crop-raising.
As is widely feared, and as the PM has made a special reference to, any tumult in the market is bound to be taken advantage of by the trading community especially in a nation like India where no rule is a guarantee against hoarding or black-marketing. While the PM has asked states to guard against such trends, the end result would be officials too would have a finger in the dirty pie. The people are the ultimate sufferers. The emerging situation is admittedly of high intensity as in the Covid-times, but this is also time to test the efficacy of governmental interventions. The safety of one-crore Indians living and working in the region is of immense concern, also as the aviation sector is hit and flights have largely been cancelled from and to the Middle-East and Gulf region. Thousands of people have died in the war, and more deaths are bound to take place. Nearly four lakh Indians have returned to their homes from the affected regions and their return is not easy in the immediate future. Indians working in the region are mainly helping the nation swell its foreign exchange reserves, which will now take a hit. It goes without saying that “saving them is our top priority”, as the PM asserted, but meaningful diplomatic and other actions in this direction should follow.
On the economic front, especially with regard to energy security, the government says “we have strategic oil reserves of 53 lakh metric tonnes,” which should suffice to tide over the present crisis for some more time. The big question is how long this military engagement would last. Iran, with its strong army and strong military muscle, is no easy prey to Donald Trump’s ambitions. Iran has fire in its belly and would not accept defeat too soon, unlike in the case of Iraq in 2003, wherein Saddam Hussein’s soldiers threw away their weapons and disappeared into thin air. Trump does not seem to have the courage to send his soldiers into Iran; and hence the hemming and hawing. He has hugely disrupted the global economy by his whimsical actions. In global diplomacy, the fact is India does not seem to count much.
