What does the rising geopolitical tensions around the Strait of Hormuz mean for India? As the US-Iran conflict sees a significant escalation, all eyes are on nearly 50% of India’s total monthly crude oil imports and more than a tenth of India’s non-oil exports, which are at risk.
Israel and the United States launched air strikes on Iran on February 28. Tehran responded within hours with retaliatory missile and drone strikes. Rising fears of a wider escalation in the Middle East could disrupt maritime trade routes across West Asia.
The Strait of Hormuz — located between Iran and Oman — is among the world’s busiest maritime corridors. It handles a substantial share of global energy shipments along with large volumes of merchandise trade.
India depends on Strait of Hormuz for 50% India’s import
Data from analytics firm Kpler shows that nearly 50% of India’s total monthly crude oil imports moved through the Strait of Hormuz during January–February. This marks an increase from 40% in November–December 2025. India’s dependence on the route has increased in recent months after it decided to move away from higher Russian volumes and return to traditional Middle Eastern suppliers.
Hormuz-linked imports rose to 2.6 million bpd in February (month-to-date), compared with 2 million bpd last year.
Any disruption, even if temporary, could increase freight costs, delay deliveries and alter trade flows across Asia and Europe.
If Hormuz faces disruption, India may try to source crude via alternative infrastructure, such as Saudi Arabia’s East-West pipeline to the Red Sea and the UAE’s Abu Dhabi Crude Oil Pipeline to Fujairah. Both routes bypass the strait.
Over 13% of India’s non-oil exports at risk – Tension around Strait of Hormuz rises
The risks for India go beyond energy security. A significant share of the country’s non-oil trade is also vulnerable to disruptions in the region.
According to a Moneycontrol analysis, more than a tenth of India’s non-oil exports pass through one of the world’s most critical maritime chokepoints.
India exported nearly $47.6 billion worth of non-oil goods to Gulf economies that depend on shipping routes linked to the Strait of Hormuz. This accounts for about 13.2% of India’s total non-oil exports, estimated at $360.2 billion. The figures highlight the scale of exposure if shipping flows are disrupted.
The United Arab Emirates accounts for the largest share of this exposure, with exports valued at $28.5 billion. Saudi Arabia follows at $11.7 billion.
Other key markets include Iraq at $2.8 billion, Kuwait at $2.1 billion, Qatar at $1.7 billion and Iran at $1.25 billion.
India’s non-oil exports remain vulnerable to Gulf demand
Unlike oil imports, where India can gradually diversify sourcing across suppliers, non-oil exports remain closely linked to demand from Gulf economies.
Key sectors at risk include engineering goods, gems and jewellery, food products, chemicals and construction materials. These sectors depend heavily on smooth and uninterrupted maritime logistics.
Any escalation in hostilities could therefore disrupt not only energy markets but also slow India’s export momentum.
Effect on oil prices
“The conflict in Middle East and reported attacks on several oil producers would exacerbate the volatility in crude oil prices. The Strait of Hormuz is a vital energy choke point through which about 20% of the global petroleum liquid and 20% of the global liquified natural gas passes. As Iran and Middle East energy producers straddle the Strait of Hormuz, a conflict in the region would impede shipping of energy through the same.” Prashant Vasisht, Senior Vice President and Co-Group Head, Corporate Ratings, ICRA, said.
Vasisht added that any attack on oil and gas production facilities of other major Middle East producers would further aggravate the situation.
“Already over the past few days, crude oil prices have risen from ~$65/barrel to $72-73/barrel now owing to the buildup of geo-political tensions in the region. A prolonged and/or widening conflict involving several oil and gas producers and Strait of Hormuz could adversely impact global crude oil and LNG supplies and raise prices of energy globally. In FY2025 about 50% of India’s crude oil and 54% of LNG imports were routed through the Strait of Hormuz.”, he added.
“For Indian refiners while crude oil could be sourced from alternate locations such as the US, Africa, South America, however elevated energy prices could lead to a soaring import bill. Additionally elevated crude oil prices would moderate the marketing margins and profitability of oil marketing companies.”