Cascading effects of the West Asia war: The risks India isn’t pricing in yet
The ongoing U.S.-Iran conflict is affecting India's economy beyond just oil prices, with disruptions in exports, remittances, and data infrastructure. India's exports declined by 7.4% in March 2026, and the conflict is expected to impact the country's consumption engine.
The U.S.-Iran conflict is rewriting global trade, affecting India's economy in multiple ways. India's exports declined by 7.4% in March 2026 due to shipping route disruptions, with commodities like basmati rice witnessing a surge in freight and insurance costs. The conflict is also impacting remittances, with nearly 38% of India's $135 billion annual remittances coming from the Gulf. India's data infrastructure is also at risk due to submarine cables routed near West Asia, which could lead to higher data costs and pressure on service-level agreements. Diversifying digital infrastructure can mitigate these risks and potentially make India a central data corridor between Europe and Asia.
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