The impact of the Israel-Hamas war is visible on world politics, but the world economy is also not untouched by it. This war can also bring many serious consequences for the Indian economy. There is a turbulent environment in Western Asia due to this war, which is going to prove very dangerous for the prices of crude oil. Because of this, there is every possibility of petrol and diesel prices increasing. But this war can harm India in 5 more ways.
At present, about 20,000 Indians are stranded in Israel. The Government of India has started 'Operation Ajay' for his safe return to his homeland. So far, there is no news of injury or death of any Indian in Israel, which is a news of great relief. However, the situation on the economic front is not so good.
Petrol and diesel will be expensive
The impact of the Israel-Hamas war on crude oil prices is fully visible. This has disrupted the supply of crude oil. India imports 85 percent of its crude oil needs. It is natural that the impact of this crude oil crisis will definitely be visible on India. Last Friday, a 6 percent jump was seen in oil prices. Whereas the price of Brent saw the highest weekly jump since February.
This increase in crude oil prices can be very disturbing for India. This may impact the upcoming 5 assembly elections and then the general elections of 2024. Therefore, there is a possibility that the Government of India and the oil companies should jointly bear this burden and there should be no increase in the prices of petrol and diesel till the elections, but if the situation does not improve even after the elections, then the situation may become serious.
These 5 losses may occur to the Indian economy
Apart from the price of petrol and diesel, the Israel-Hamas war may cause these 5 losses to the Indian economy in the coming times…
Delay in expansion of 5G connectivity: The Israel-Hamas war is likely to have the biggest impact on the value of the rupee against the dollar. In the long term, this can reduce the value of the rupee by up to 3 percent, which will make international trade expensive. Of the telecom equipment currently used for 5G in India, about 67 percent is imported from abroad. These are manufactured by Ericsson, Nokia and Samsung. Their imports will become expensive due to weakening of rupee against the dollar.
Exports will be expensive: India gets an advantage in exporting due to the relation between rupee and dollar. Now, due to Israel-Hamas war, insurance premium may become expensive for exporters. At the same time, shipping cost may also increase. This will not just affect our bilateral trade with Israel. Rather, it will either make trade with many European countries expensive or reduce export margins.
Diamond-jewellery business will be affected: Surat city of India is the largest hub of diamond cutting in the world. At the same time, India exports cut and polished diamonds worth $1.2 billion to Israel every year. So it imports rough diamonds worth $520 million and cut and polished diamonds worth $220 million from Israel. In this way, the Israel-Hamas war will completely spoil the progress of this trade.
Corporates will suffer loss: Israel-Hamas war will also shock many big corporate houses of India. Many Indian companies do business in Israel. These include Sun Pharma, Tata Consultancy Services, Wipro, Adani Group, State Bank of India, Larsen & Toubro, Bharat Forge and Infosys. If this war prolongs, all these companies may have to suffer huge losses.
Impact on pharmaceutical business: Israel-Hamas war is greatly affecting another business of India. This is the pharmaceutical industry, in which India is the world leader. India exports medicines on a large scale to many countries in Western Asia, North Africa and Europe. But now this business is getting affected due to this war. There has been a decrease in the shipment of medicines in the last two weeks. At the same time, this war has also affected the exports to the surrounding countries.
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