Published Online:October 2025
Product Name:The IUP Journal of International Relations
Product Type:Article
Product Code:IJIR011025
DOI:10.71329/IUPJIR/2025.19.4.18-38
Author Name:Rupali Khurana
Availability:YES
Subject/Domain:Arts and Humanities
Download Format:PDF
Pages:18-38
The escalating geopolitical tensions between Israel and Iran during 2023-2025 have created unprecedented challenges for energy-dependent economies, particularly India. The present study critically examines the multifaceted economic implications of the Israel-Iran conflict on India’s macroeconomic framework, with specific emphasis on energy security vulnerabilities, inflationary dynamics, and trade route disruptions. The study employs a mixed-methods approach, incorporating both primary survey data from 150 industry stakeholders and comprehensive secondary data analysis. It reveals that India’s heavy dependence on crude oil imports (exceeding 85%) has amplified its susceptibility to Middle Eastern geopolitical shocks. The findings indicate that a $10 per barrel increase in crude oil prices correlates with a 0.4 percentage point rise in retail inflation and a 0.3 percentage point reduction in GDP growth (Reserve Bank of India, 2024). Supply chain disruptions through critical maritime chokepoints, particularly the Strait of Hormuz and Red Sea routes, have resulted in freight cost escalations of 15-20% and extended shipping times by 10-14 days (Maritime India Summit, 2024). Furthermore, the study identifies sector-specific vulnerabilities, with micro, small, and medium enterprises (MSMEs), agricultural inputs, and petroleum-dependent industries experiencing the most severe impacts. The analysis reveals that the Indian rupee’s depreciation to 84.25 per USD has exacerbated import costs, contributing to a widening current account deficit. The study contributes to the existing literature by providing empirical evidence of how regional conflicts in strategic energy corridors can cascade into comprehensive economic disruptions for emerging economies.
The contemporary geopolitical landscape of the Middle East has been characterized by escalating tensions between Israel and Iran, creating ripple effects that extend far beyond regional boundaries and significantly impact global economic stability. The period spanning 2023-2025 has witnessed an intensification of this conflict,