Prime Minister Narendra Modi issued a stark warning to Parliament on Tuesday, cautioning that the escalating US-Iran conflict could have long-lasting economic and strategic consequences for India, a nation that imports 85% of its oil and maintains delicate diplomatic relationships with both Washington and Tehran.
Addressing the Rajya Sabha, the upper house of Parliament, Modi emphasized that Indians should "be prepared for challenges" as the conflict threatens to disrupt energy supplies, inflate import costs, and widen the country's already substantial trade deficit, which hit $283 billion in FY25.
"The impact may be long-lasting," Modi told lawmakers, according to the Hindustan Times. The Prime Minister's rare public acknowledgment of economic vulnerability comes as India navigates one of the most complex geopolitical moments in recent decades.
In India, as across the subcontinent, scale and diversity make simple narratives impossible—and fascinating. The US-Iran war poses multiple simultaneous threats to the world's fourth-largest economy: soaring oil prices that could further weaken the rupee (already at a record low of ₹94 to the dollar), disrupted trade routes through the Strait of Hormuz through which much of India's energy imports pass, and the diplomatic tightrope of maintaining ties with both antagonists.
India has historically enjoyed strong relationships with Iran, particularly around energy cooperation and the strategic Chabahar Port in southern Iran, which provides India access to Afghanistan and Central Asia while bypassing Pakistan. Simultaneously, India has deepened defense and technology partnerships with the over the past two decades as part of the Indo-Pacific strategic framework.
