Escalating tensions in the Middle East, especially after the US bombing of the nuclear facilities in Iran, have led to rising fears of the Strait of Hormuz being closed by Iran.
Escalating tensions in the Middle East, especially after the US bombing of the nuclear facilities in Iran, have led to rising fears of the Strait of Hormuz being closed by Iran.
Iran’s Parliament, the Majlis, has reportedly approved the closure in response to the attacks by the US, however, the final decision lies with the Supreme National Security Council.
A crucial maritime passage, the Strait of Hormuz connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. It handles 20% of global oil and gas transportation. Major oil-producing nations of the region, Saudi Arabia, Iraq, UAE, Qatar, Iran, and Kuwait, depend upon it for their exports.
So far as India is concerned, according to Crisil Ratings titled “Middle East situation: Limited impact on India Inc for now”, “repercussion of any further significant increase in the crude oil prices from the current levels would vary across sectors that are directly or indirectly exposed to it and impact on profitability will depend on the ability to pass on the cost increase”
There are also fears of sectors like basmati rice and fertilisers being impacted if war continues
“So far, the ongoing uncertainties in the Middle East have not had a significant impact on India Inc’s global trade.
“However, if the situation deteriorates, some sectors such as basmati rice could see heightened impact and will require monitoring, while others like fertilisers and diamonds — both cut and polished — may also see some impact,” it says
Iran is one of the largest importers of Indian basmati along with Saudi Arabia, Iraq and the United Arab Emirates.
Iran and Israel accounted for 14% of India’s basmati rice exports in 2025 fiscal, as per the report.
