India’s Fragile Pivot As Middle East Conflict Escalates

In the early hours of June 12th and 13th, 2025, Israel launched its most significant military operation against Iran in over a decade. The strikes targeted multiple nuclear and military installations—near Natanz, Isfahan, Fordow, and several key Revolutionary Guard missile depots. The attacks followed months of rising tensions, proxy strikes, and tit-for-tat escalations after earlier confrontations in 2024. But this time, the scale was altogether different, a direct strike on Iran’s nuclear programme itself.

The world woke up to horrific images of fireballs lighting the Iranian skies, the loss of innocent lives, and anxious families fleeing towns near targeted sites. Iranian casualties—both military and civilian—are feared to be in the hundreds. The images pierce our conscience, reminding us yet again of the terrible cost of unresolved geopolitical rivalries. Amidst the ruins, humanity once again pays the price for power struggles it neither starts nor controls.

The fallout: The economic and humanitarian aftershocks were immediate:

Brent crude spiked to $116/bbl, as global markets priced in the real possibility of wider Middle East warfare.

Global supply chains faltered once again, just as fragile recovery post-COVID, Ukraine, and Red Sea disruptions had begun to stabilise.

The Strait of Hormuz became a high-risk warzone, threatening 20% of global oil shipments.

Insurance premiums on shipping quadrupled overnight, with major shipping lines halting transits.

Gold surged past $2,450/oz, as investors fled to safety.

Global equity markets plummeted, with the Dow losing 2,000 points and Asian markets in freefall.

For India, and much of the Global South, this conflict is not an abstraction. It is an everyday threat to fuel security, food prices, currency stability, employment, and millions of lives bound to Middle Eastern economies.

India’s exposure: India’s vulnerabilities, already acute, are now pushed into dangerous territory:

Energy shock: India imports nearly 85% of its crude oil, and even modest price spikes translate into inflationary surges, fiscal stress, and rupee volatility.

Diaspora jeopardy: 9 million Indians live in the Gulf—engineers, nurses, workers, and professionals—whose safety is now imperilled. Their $100B+ remittances form a crucial lifeline for countless families back home.

Chabahar project at risk: The port that symbolises India’s outreach to Central Asia now sits uncomfortably close to warfronts and may face renewed US pressure.

Red Sea and Hormuz blockade risk: Over 60% of Indian trade passes through these very corridors; delays and insurance costs are rapidly rising.

Currency pressures: The rupee crossed 86 to the dollar in overnight trading, forcing RBI interventions.

The loss beyond numbers: We must pause to reflect: behind these numbers lie countless families—bereaved parents, orphaned children, and livelihoods lost. The world’s tragic addiction to power projection has once again cost innocent lives in the streets of Isfahan and the valleys near Natanz. For every barrel of oil priced today, for every ship delayed at sea, there are human stories of suffering we dare not ignore.

This is not a regional conflict anymore. It is the beginning of a global destabilisation with profound humanitarian, economic, and geopolitical implications. The Middle East’s fire spills into boardrooms, kitchen tables, and school classrooms across continents.

India’s containment strategy: India’s previously constructed containment mechanisms, though tested, remain critical.

Energy shield activation: India has initiated managed releases from its 39M barrel strategic reserve to buffer short-term price surges; expanded imports from Russia, Venezuela, Brazil, and Guyana are helping offset Gulf supply uncertainty; and bilateral payment arrangements are being revived to minimise dollar exposure in emergency energy trade.

Diaspora emergency management: The MEA’s 24x7 Crisis Cells have been activated in UAE, Saudi Arabia, Qatar, Kuwait, and Bahrain; contingency evacuation protocols are being quietly rehearsed in partnership with Gulf governments; and UPI-linked remittance platforms are being kept operational to ensure continued remittance flows.

Diplomatic high wire act: India maintains its delicate balance—expressing sorrow over the loss of life while avoiding entanglement in blame; quiet backchannel diplomacy continues through Oman, UAE, and Saudi interlocutors; and India has reiterated its call for “immediate cessation of hostilities, de-escalation and unconditional dialogue” at the UN.

Maritime and military vigilance: The Indian Navy has intensified deployments with over 16 warships on active Arabian Sea and Gulf patrols; coordination with EU NAVFOR and US CENTCOM ensures maritime security for Indian flagged vessels; and cyber-intelligence networks are on high alert for terror cells exploiting the conflict’s chaos.

Financial armour: The RBI is deploying its $643B forex reserves to cushion currency volatility; the GOI is releasing additional food stocks to prevent domestic inflation from spiralling; export incentives and credit guarantees are being expanded to protect MSME exporters affected by Red Sea disruptions.

Emerging fault lines: Yet, India’s options remain delicately constrained.

US sanctions recalibration: Future pressure may fall on India’s limited engagement with Iran’s Chabahar and oil trade.

China’s opportunism: Beijing seeks deeper energy, port, and technology partnerships with the Gulf amid Western distraction.

Houthi escalation: Yemen’s militia threaten to choke Red Sea routes further.

Domestic polarisation risks: Pro-Israel and pro-Palestine narratives stir domestic unrest and test India’s social harmony.

The path forward: India stands today not as a power player in this confrontation but as a nation forced into the difficult art of protective neutrality—preserving energy security, shielding its diaspora, safeguarding trade routes, and insulating its economy.

Our prayers are with the innocent civilians who bear the unbearable. But even as we lament, we must continue building resilience architecture:

Expanding domestic renewables to cut oil dependence.

Strengthening diversified supply chains into Africa, ASEAN, and Eurasia.

Elevating diplomacy with mini-lateral coalitions (Quad, I2U2, BRICS+) for risk hedging.

Building rapid-response diaspora protection frameworks.

Deploying AI-driven supply chain monitoring and maritime security intelligence.

Conclusion: June 2025 has marked a dark turn in an already volatile decade. The attack on Iran’s nuclear infrastructure may trigger fresh waves of retaliation, escalation, and long-term instability across the Middle East.

For India, the world’s largest democracy, this is not merely a foreign policy challenge—it is a test of strategic maturity, economic resilience, and moral courage. We stand watchful, deeply concerned, and prayerful—for peace, for stability, and for the return of sanity to a region burning dangerously close to our shores.

May wisdom yet prevail.

Mr. Shailesh Haribhakti is Chairman, Desai Haribhakti Group and is a staunch believer in Corporate Social Responsibility, governance and promoting a greener environment.