West Asia Conflict and India’s Industrial Supply Chains
The ongoing conflict in West Asia is not only destabilising global oil and gas markets but is also threatening the supply of key industrial inputs used by several core Indian industries.
India imports large quantities of raw materials from the Gulf Cooperation Council (GCC) region, making sectors such as steel, fertilizers, cement, power transmission, and diamond processing vulnerable to geopolitical disruptions.
With the possibility of disruptions in shipping routes like the Strait of Hormuz, concerns about supply chain shocks have intensified.
Importance of West Asia for India’s Industrial Imports
The West Asia region includes GCC countries such as:
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Saudi Arabia
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United Arab Emirates
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Qatar
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Kuwait
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Oman
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Bahrain
It also includes regional economies such as Iran, Iraq, Israel, Jordan, Lebanon, Syria, and Yemen.
According to the Global Trade Research Initiative (GTRI), India imported about $98.7 billion worth of goods from the region in 2025, highlighting the region’s strategic economic importance.
Key Industrial Inputs at Risk
Several industries rely heavily on raw materials sourced from West Asia.
1. Construction Sector
Two essential minerals imported from the region are:
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Limestone – key ingredient in cement manufacturing
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Gypsum – widely used in cement and construction materials
India imported:
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$483 million worth of limestone (68.5% of imports)
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$129 million worth of gypsum (62.1% of imports)
Any disruption could increase cement prices and delay infrastructure projects.
2. Fertilizer Industry
The fertilizer sector depends on sulphur imports.
India imported:
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$420 million worth of sulphur (65.8% of imports)
Sulphur is used to produce sulphuric acid, a critical input in fertilizer production and chemical industries.
If disruptions persist for over a month, domestic urea production could be affected.
3. Steel Industry
India also imports direct reduced iron (DRI) from West Asia.
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$190 million worth of DRI (59.1% of imports)
DRI is an important input used in steel manufacturing.
However, the bigger challenge for the steel sector is energy cost volatility, as steel plants rely heavily on LNG and LPG.
4. Power Transmission and Renewable Energy
India imported $869 million worth of copper wire from West Asia, accounting for 50.7% of total imports.
Copper wires are crucial for:
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Power transmission infrastructure
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Electrical equipment
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Renewable energy projects
Any supply disruption could delay electricity infrastructure and clean energy expansion.
5. Diamond Processing Industry
India’s diamond sector, especially the cutting and polishing hub in Surat, depends on imports of rough diamonds.
India imports over 40% of its rough diamonds from West Asia, which are then processed and exported globally.
Supply disruptions could affect export earnings and employment in the sector.
Energy and Shipping Risks
Beyond raw materials, the conflict also threatens energy supplies.
India’s crude oil reserves are estimated to last about one month, prompting refiners to increase purchases of discounted Russian oil.
Gas companies are also evaluating the possibility of reducing industrial gas supplies if LNG shipments from Qatar are disrupted.
If shipping through the Strait of Hormuz is blocked even for a week, the consequences could include:
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Energy price spikes
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Industrial slowdown
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Supply chain disruptions across multiple sectors
Possible Alternative Supply Sources
Industry experts believe some raw materials could be sourced from other regions:
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Limestone – Thailand, Vietnam
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DRI – Libya, Malaysia
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Sulphur – Southeast Asia
However, replacing Gulf supplies may involve:
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Higher transportation costs
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Longer supply chains
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Delays in industrial production
Broader Economic Implications for India
The conflict highlights India’s vulnerability to geopolitical disruptions in West Asia.
Major economic risks include:
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Higher energy prices
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Rising construction costs
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Supply shortages in fertilizer and steel
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Export disruptions in diamonds and engineering goods
Such shocks can affect economic growth, inflation, and industrial output.
Conclusion
The escalating conflict in West Asia demonstrates how geopolitical tensions can quickly disrupt global supply chains. India’s strong trade and energy ties with the region make its industrial sectors particularly vulnerable to such disruptions.
To reduce risks, India may need to:
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Diversify import sources
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Strengthen strategic reserves of critical minerals
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Develop domestic production capacity
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Enhance maritime security along key trade routes
Ensuring resilient supply chains will be essential for safeguarding India’s economic stability in an increasingly uncertain geopolitical environment.
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