Author name: Verature Overseas

India’s Exports in the Shadow of the US–Iran War: What Every Supplier Must Do Right Now? On February 28, 2026, US and Israeli forces launched coordinated strikes on Iran. Within hours, the Strait of Hormuz — the narrow waterway through which one-fifth of the world’s oil flows every single day — was effectively shut down. For an Indian supplier sitting in Ludhiana, Surat, or Hyderabad, this might have felt like breaking news from a faraway conflict. It wasn’t. It was a supply chain event that landed directly on your doorstep. India imports approximately 90% of its crude oil and nearly half of its liquefied petroleum gas. About half of its crude and over three-fourths of LPG imports pass through the Strait of Hormuz. The moment that waterway closed, every Indian business that buys fuel, ships goods, uses fertilisers, or exports perishables became a stakeholder in this conflict. What Has Actually Happened: 18 Days That Changed Trade The US-Israel war on Iran, which began on February 28, has spread across at least a dozen countries, closed the Strait of Hormuz — the world’s major oil artery — and has claimed more than 2,300 lives in the region. Starting March 4, Iranian forces declared the Strait “closed,” threatening and carrying out attacks on ships attempting to transit it. War risk insurance has risen sharply since the fighting began on February 28. At least 16 vessels in the region have been struck by drones or other weapons Sector by Sector: How Indian Exports Are Being Hit India’s farmers — already navigating volatile monsoons and input cost pressures — are now facing a compounding crisis. India’s agricultural exports have already been impacted, with shipments to Gulf countries of bananas, rice, and other products dramatically cut. Farmers have been forced to dump supplies into local markets at lower prices. Pharmaceuticals: The World’s Pharmacy Is Under Pressure India is rightly called the “Pharmacy of the World” — and right now that pharmacy is experiencing a supply chain emergency. Air freight costs spiked 400% in 48 hours, affecting the vast majority of Indian pharma exports which transit through affected airspace and waters. Major manufacturers are warning of inventory shortages as emergency air detours face severe capacity constraints. The March 2026 escalation produced the most immediate logistics disruption through widespread Middle East airspace closures. Air India cancelled all flights to and from the UAE, Saudi Arabia, Israel, and Qatar, with some New Delhi–Europe routes also affected. Engineering & Manufacturing: The Hidden Cost Spiral For Indian engineering goods exporters — one of the country’s star-performing sectors in recent months — the war is showing up as a relentless cost spiral. Sustained increases in oil prices could drive up material costs for auto manufacturers by as much as 25%, and will raise production costs for semiconductor manufacturing — a sector with ties to everything from consumer electronics to aerospace and defence. For Indian exporters competing on cost, this is a margin-compression event that is difficult to pass on to buyers without risking order cancellations. Air Freight: The Invisible Chokepoint Even exporters who don’t ship through the Strait of Hormuz are being caught by airspace disruptions. Air freight rates have risen by 70% on some routes since the start of the US-Israeli war on Iran. For high-value, time-sensitive Indian exports — from cut flowers and fresh produce to electronics and pharmaceutical samples — this is a direct hit to competitiveness.  Things Indian Suppliers Must Do Right Now  Reroute and Replan Your Logistics — Today If your goods move through the Gulf, Middle East airspace, or the Strait of Hormuz corridor, you need an alternative plan in place before your next shipment, not after it gets stranded. The conflict has pushed the Strait of Hormuz to a de facto closure through insurance withdrawal, with the outcome for cargo flow largely the same as a physical blockade. This is a real supply disruption, not a risk premium event — physical barrels and product flows are being affected simultaneously. What to do: Contact your freight forwarder this week. Identify Cape of Good Hope rerouting costs for sea freight. For air freight, compare the cost of rerouting via Central Asia or Europe versus holding inventory. Price the options — and make a decision rather than waiting for clarity that may not come soon. Secure Your Input Inventory Now The single most impactful short-term action for most Indian suppliers is to build buffer stock on critical inputs before prices rise further or availability tightens. This conflict is creating physical supply disruptions. Even if temporary, rising insurance costs and increased perceived risk are rippling through global supply chains more severely than the pandemic did. What to do: Identify your top 5 imported inputs and check your current stock levels. If you have less than 60 days of buffer, explore sourcing from alternative geographies — Russia, Central Asia, or domestic alternatives — even at slightly higher cost. The premium for security is worth it right now. Pivot Your Market Mix Away from West Asia Dependency This crisis is a brutally clear signal that over-reliance on Gulf markets — for both exports and input sourcing — is a structural vulnerability. West Asia accounts for a substantial portion of India’s overall food exports while also being the source of key inputs such as fertilisers. A long-drawn war could hit India’s farm sector significantly. What to do: If more than 30% of your export revenue comes from Gulf markets, now is the time to accelerate market diversification. Eastern Europe, Southeast Asia, and Sub-Saharan Africa are markets with growing demand for Indian agricultural produce, pharmaceuticals, and engineering goods. Start qualifying new buyers — even if orders are small at first. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo. Communicate Proactively with Your Buyers Your international buyers are nervous. They are watching the same news you are, and they are wondering whether their Indian suppliers can deliver. The ones who will lose