Middle East Tensions: It has been almost two weeks since the ongoing conflict in West Asia, but no concrete improvement is visible in the situation yet. Neither has there been any indication of agreement from Iran nor has there been any indication of easing of tension from the United States or Israel. Meanwhile, the prices of crude oil are again rising. Recently Crude Oil had reached the level of around $120 per barrel and now again it is trading above $100.
This tension is directly affecting India’s economy and the lives of common people. Let us understand what impact this conflict is having on India.
1-Increasing shortage of gas
Global energy supply has been affected due to the war. Especially the closure of the Strait of Hormuz has had a major impact on the supply of oil and gas. India imports about 80% of its energy needs, so this crisis is directly impacting the country.
Many industries like fertilizer plants, tiles factories and restaurants are being affected by the shortage of gas. The National Restaurant Association of India (NRAI) has advised its members to shorten the menu, increase the use of electrical appliances and reduce working hours.
2- Impact on funeral arrangements
The effect of LPG shortage has reached the crematoriums. In many places, gas fired furnaces have had to be closed and now the last rites are being performed with wood.
3-Airfare is expensive
Due to increase in the price of jet fuel, the costs of aviation companies have increased. Apart from this, flight insurance on Middle East routes has also become expensive. Due to the war, more than 46,000 flights have been canceled worldwide and international airfares have increased significantly.
4-Fall in gold and silver prices
Gold prices generally rise during times of global stress as it is considered a safe investment. But this time there is a fear of inflation increasing due to rise in oil prices. This has increased the possibility of the Federal Reserve not reducing interest rates. Gold prices have come under pressure due to the strong dollar. According to the report, Goldman Sachs believes that now cutting interest rates is not possible before September.
5-Effect on economic development
India has set a target of becoming a developed country by 2047, for which 8–11% GDP growth rate is considered necessary. But if the price of crude oil remains around $100 per barrel, it may affect economic growth. It is estimated that due to this, India’s GDP growth rate may decline by about 0.60 percent (60 basis points).
Also read: Amidst the Iran war and the raining bombs of America and Israel, China has now taken a big step.
