The camaraderie between US President Donald Trump and Indian Prime Minister Narendra Modi is unlikely to save India from the crisis that looms large after United States' foolhardy attack on Iranian general Qassem Soleimani.
Oil price hike, spiralling gold prices, falling share values and immigration crisis are issues the nation will have to deal with in the upcoming months.
India imports 84 per cent of its oil requirements and it constitutes 27 per cent of the country's total imports. The Indian growth rate of 4.5 per cent is likely to take a further hit in this context as soaring fuel prices will contribute to the rising inflation in the state.
In this context, Trump's argument that Soleimani was behind the attack on Israeli diplomat in New Delhi in 2012 or assurance that the world is better off without the likes of the general, will not ease India's mounting economic worries.
How will India's oil prices be affected?
The oil prices have already taken a hit post the attack-- international fuel prices soared by 4 per cent on Friday. Brent crude futures hit a high of $69.16 a barrel after an increase by $3, the highest since September 17.
The crucial problem here is that all attacks and counter attacks following Soleimani's killing is likely to be on India's primary oil sources.
Though India's reliance on Iran for crude oil zeroed down post US sanctions, Iraq remains its top supplier and consecutive attacks on Iraqi soil is likely to bleed our coffers dry. Iraq recently rose to the top of the importers' list dethroning Saudi Arabia. After the Iranian drone attack on Saudi Arabia hit its oil supplies last year, India has diversifying its import sources.
The crude oil imports to India from US has risen by 72 per cent in the past year but the country cannot be a permanent solution to India's fuel problems due to logistical, financial constraints.
The transport of oil ships across the Straight of Hormuz will indubitably be affected by the escalating tensions in the middle east.
India's Chabahhar port project in Iran to bypass Pakistan and facilitate trade with Central Asia is also be affected by the new development.
Immigrants
Millions of Indian expats are likely to be stranded in Iran, Iraq and neighbouring countries if the issue escalates into a war.
Besides plunging India into a diplomatic crisis, the situation will also adversely affect the inflow of foreign remittance into the country.
According to Ministry of External Affairs data, out of the 1.3 crore Indians living abroad more than 85 lakh belong to GCC nations, Iran and Iraq. Iran and Iraq combined had 14,000 Non Resident Indians in 2018.
Why the attack is a turning point in ME politics?
General Qassem Suleimani was the head of the Iranian Islamic Revolutionary Guard Corps' (IRGC) Quds Force. 'The shadow commander' as he was popularly called was a major tactician in Middle East politics and garnered the world's attention with his huge influence in Lebanon's Hezbollah force and Palestine's Hamas.
Needless to say that these ties made him a powerful enemy of US ally Israel. Being a driving force of Shiite militia groups and proxy war in the Middle East, the general never found much favour with the Sunni majority Gulf countries either.
The IRGC, the Iranian armed force established to maintain the Islamic republic's political system and maintain the sovereignty of the country, has been designated a terrorist organisation by the United States, Canada, Bahrain and Saudi Arabia.
The Quds Force, an elite, special operations unit within the IRGC had become a force to be reckoned with by the turn of the century as its primary objective was to check Western advances in the Middle East through unconventional warfare and military intelligence.
The Quds, which directly report to Iran's supreme leader Ayatollah Ali Khamenei, played a key role in fighting the Islamic State in Iraq and Syria. They played a seminal role in recapturing the Iraqi city of Tikrit from IS clutch in 2015.
The Iranian presence in Iraqi soil has also been a major irritant for the US troops stationed here.
The reversal of the strategic US-Iran nuclear policy initiated by the Obama administration to check Iran's advances in the Middle East and the harsh US economic sanctions imposed on Iran also severely strained the relationship between the two nations.
The escalating tensions coupled with the attack on the US embassy in Baghdad and the killing of a US contractor in Iraq, perhaps acted as the trigger for the US attack.
The Gulf Cooperation Council (GCC) nations, are likely relieved at Soleimani's demise as his proxy militias have been wreaking havoc in the region for some time now. Saudi's oil reserves were severely depleted after the Iranian drone attack on its oil installations.
But be what may, the assassination is likely to plunge the Middle East into an imminent crisis-of war and diminishing oil supplies. And a Middle East crisis will in all probability take its toll on India!
