West Asian Conflict’s Impact on Core Indian Industries
Context:
The intensifying war in West Asia is causing severe turbulence across global oil and gas markets.
More critically, these escalating geopolitical tensions are now threatening to disrupt the steady flow of essential industrial inputs from the region, posing a significant operational risk to several core Indian industries
Vulnerable Sectors and Critical Inputs:
The primary sectors facing immediate vulnerability include the steel, fertilizers, cement, and power transmission industries.
These crucial industries depend heavily on imports of specific raw materials, namely limestone, sulphur, gypsum, direct reduced iron (DRI), and copper wires.
Notably, more than half of India's total imports of these specific commodities have historically originated from the West Asian region.
A report by the New Delhi-based trade think tank GTRI indicates that India imported goods worth $98.7 billion from the region in the year 2025 alone.
Geopolitical and Geographic Chokepoints:
The impacted region broadly encompasses the six Gulf Cooperation Council (GCC) countries—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE—alongside other key regional economies such as Iran, Iraq, Israel, Jordan, Lebanon, Syria, and Yemen.
Sector-Specific Challenges and Mitigation:
The Steel Sector:
While direct inputs like limestone can alternatively be sourced from Thailand and Vietnam, and DRI( direct reduced iron) can be procured from places like Libya or Malaysia, the primary challenge remains the extreme volatility in oil and gas prices.
Experts highlighted that the steel industry faces major challenges securing energy and scrap.
Because the sector relies heavily on LPG and LNG for its decarbonisation efforts, current availability has become a critical issue.
The Fertilizer Sector:
Analysis noted that the industry may not feel an immediate impact as it is currently an off-season for fertilizer consumption in India.
However, if disruptions of inputs like LNG and sulphur linger for a month or more, domestic urea production and availability for the upcoming agricultural season will be severely impacted.
To mitigate this risk, the industry is actively exploring alternative suppliers in Southeast Asia for materials like sulphur.