US-Iran Conflict Puts Nearly a Fifth of India's Imports at Risk

India's Vulnerability to Strait of Hormuz Disruptions

Key Findings

• The Strait of Hormuz corridor accounts for 19.7% of India's total imports, including oil, bullion, food products, and industrial chemicals.
• Crude oil trade through the corridor stood at approximately $65.2 billion in 2024, with 46% of India's total crude imports tied to this corridor.
• Disruptions to the corridor could push up India's import bill and amplify volatility in downstream fuel and transport costs.

Risk Areas

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• Food imports: India imported $286 million worth of dates in 2024, with 92.7% originating from Hormuz-linked economies, led by the UAE ($124.4 million), Iraq ($83.5 million), and Iran ($45.3 million).
• Precious metals: India's imports of unwrought silver show 91.8% dependence on the corridor, with 99% sourced from the UAE ($1.94 billion). Non-monetary gold imports from Hormuz economies totaled $16.5 billion (28.8% of total imports).
• Industrial chemicals: India's import basket shows 100% dependence on the Hormuz corridor for ethylene glycol, 87.7% for methanol, and 50-72% for several polymer and petrochemical intermediates.
• Fertiliser supply chains: India signed a long-term agreement with Saudi Arabia to meet one-third of domestic diammonium phosphate (DAP) demand, strengthening supply security but deepening exposure to Gulf shipping routes.

Sectoral Implications

• Disruptions to the Strait of Hormuz could ripple through plastics, packaging, textiles, and manufacturing supply chains, affecting inflation, manufacturing costs, and external trade balances across multiple sectors.
• The impact could extend beyond crude oil, affecting food imports, bullion inflows, and industrial feedstocks.