look news india
New Delhi: Escalating conflicts in Israel, Iran and Lebanon in West Asia and workers' strike at major US ports have raised concerns among Indian exporters. Exporters fear that increased tensions could increase transportation costs and disrupt supply chains. Its effect can also be seen on the prices of crude oil.
FIFO, an organization of Indian exporters, said there was no immediate impact but oil prices have started rising as the conflict escalated. Iran is a major supplier of oil despite US sanctions. If tough sanctions are imposed on Iran, a major oil importer may have to exit the market. This may increase crude oil prices and lead to regional instability.
Furthermore, any disruption to the movement of goods through the Strait of Hormuz between Oman and Iran will increase shipping costs. Air routes have also been affected after Iran's missile attack. This may disrupt the supply chain and also affect investor sentiment.
The Indian Engineering Export Promotion Council said the situation has become critical due to the ongoing conflict in West Asia. The situation is being closely monitored. If the conflict turns into a war, it can go to any extent and trade can also be disrupted.
Indian exporters are facing further challenges as the International Longshoremen's Association has announced a strike by port workers, bringing to a standstill 36 major ports along the US East Coast and the Gulf of Mexico. About 55 percent of containers moving in and out of the United States pass through the affected ports.
Moody's analysts said in a report that India, Indonesia and South Korea are highly dependent on these ports. This will affect them more, while economies like Hong Kong, Singapore and Malaysia will not be affected. Monetary policy rates may remain unchanged due to the ongoing conflict in West Asia as there is a need to assess the potential impact of the conflict on oil prices and the overall economy.