Strait of Hormuz Crisis Triggers Shock Shift
New Delhi: India’s trade and energy supply patterns are undergoing major changes amid the continuing conflict in West Asia and the prolonged closure of the Strait of Hormuz, one of the world’s most important shipping routes.
According to a report citing Commerce and Industry Ministry data, exporters have increasingly started shifting cargo movement away from traditional Gulf transit hubs as disruptions continue across the region.
The most significant change has emerged in India’s trade relationship with the UAE and Singapore, both major transshipment centres that also have free trade agreements with India.
Singapore has now overtaken the UAE as India’s second-largest export destination after witnessing a sharp rise in imports from India.
Exports to Singapore surged by nearly 180% in April, reaching $3.20 billion compared to $1.14 billion during the same month last year.
In contrast, exports to the UAE fell sharply by 36% to $2.18 billion, down from $3.43 billion a year earlier.
Officials said exporters have increasingly been routing shipments through Singapore since February as uncertainty and disruptions intensified in the Gulf region.
The Strait of Hormuz, located between Iran and Oman, has remained largely shut since March 2, severely affecting global maritime trade.
India’s import patterns have also changed significantly, especially in the energy sector.
Countries such as Oman, Peru and Nigeria have now entered India’s list of top import partners. Imports from Oman alone more than tripled in April, rising to $1.48 billion from $429 million last year.
Meanwhile, imports from Qatar declined sharply. Data showed shipments from Qatar dropped by 47% in March compared to the same period last year.
However, imports from Saudi Arabia recovered strongly in April and rose to $3.85 billion after weakening in March.
The continuing West Asia conflict and disruption in oil supplies have increased global energy prices, adding pressure on India’s import bill.
The Indian rupee has weakened significantly against the US dollar and has fallen more than 5% since February-end.
To control rising costs, the government has introduced austerity measures, while oil companies recently increased petrol and diesel prices for the first time in four years. Import duties on precious metals have also been raised.
Before the conflict escalated, the Strait of Hormuz handled nearly 20% of global oil trade, making the current disruption one of the biggest energy supply challenges in recent years.
