Govt must urgently review energy risk scenarios due to Iran-Israel war: GTRI

Amidst the escalating Israel-Iran conflict, a think tank urges the Indian government to urgently assess energy risks and diversify crude oil sources. The tensions threaten India’s trade routes and commercial interests, particularly through the Strait of Hormuz and the Red Sea. Disruptions could inflate oil prices, increase shipping costs, and impact Indian exports.

The escalating Iran-Israel conflict is poised to disrupt global trade, potentially increasing freight rates and insurance costs, impacting India’s exports to Europe and Russia. Concerns rise over merchant ship movements through the Strait of Hormuz and Red Sea, vital routes for global petroleum and container traffic.

The UK-India Free Trade Agreement (FTA) is poised to give the UK a significant competitive edge in manufacturing, particularly in the automotive and machinery sectors. UK Business and Trade Secretary Jonathan Reynolds highlighted the deal as India’s best offer to date, projecting a substantial increase in bilateral trade.

​​The commodities, sourced from Afghanistan and Iran, have already seen a 15-100% surge in prices as imports through Pakistan have been completely blocked in the aftermath of the April 22 Pahalgam terrorist attack, they said.

India and China have agreed to engage in talks, addressing specific economic and trade concerns, including rare earth metal supplies affected by Chinese export controls. Both nations aim to expedite the resumption of direct flights and finalize an updated Air Services Agreement.

India’s exports are anticipated to face increased logistics costs, potentially rising by 15-20%, due to the ongoing Israel-Iran tensions. Closures of air routes over Pakistan and Iran will escalate air cargo expenses, while higher fuel costs impact sea transport. Disruptions are expected in shipping lines via the Red Sea and Suez Canal, creating uncertainties for […]

Global shipping lines had started avoiding the West Asian region after the Israel-Gaza conflict escalation in October 2023. Attacks on commercial vessels in the Red Sea by Iran-backed Houthi militants virtually crippled trade through the Suez Canal. This led to major companies rerouting trade through the Cape of Good Hope.

India has requested IREL to halt rare earth exports to Japan, aiming to secure domestic supplies and lessen reliance on China. This decision follows China’s export restrictions, which have impacted global industries. IREL intends to expand domestic mining and processing capabilities, seeking partnerships for rare earth magnet production, while India plans incentives for local processing […]

China has hinted at potential discussions with India regarding export restrictions on rare earth materials, expressing a willingness to enhance dialogue and cooperation with various nations to ensure stable industrial supply chains. This follows concerns in India about shortages affecting automobile and semiconductor manufacturing.

The minister, on a four-day visit to Switzerland and Sweden, said discussions on 90% of content were complete on India-EU FTA, with services and rules of origin negotiations slated to start from Monday. However, he said, key issue to be addressed is non-tariff barriers to make it easy to do business.