West Asian Crisis May Have Ripple Effect on Indian Exports

West Asia Conflict Poses Threat to India's Exports

Indian exports are likely to be impacted by the ongoing West Asia conflict, warned Central Commerce Secretary Rajesh Agrawal on Saturday. Speaking at a press conference on the sidelines of the 'Chintan Shivir - Scaling Up Pharma Exports', Agrawal expressed concerns that the crisis may affect not only imports but also exports to other parts of the world.

India's exports during the last financial year were expected to remain on a positive trajectory despite the crisis, Agrawal stated. However, the West Asia crisis has already had a significant impact on both imports and exports last month, with energy being a major part of the Indian import market.

According to Agrawal, around 12-13% of India's exports go to the West Asia region, making it a crucial market. If the conflict continues, this will directly impact Indian exports, and some of the value chains may rotate back, affecting exports to other parts of the world.

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The exact impact of the West Asia crisis on Indian exports will be known in a couple of weeks, Agrawal said. In the meantime, the Centre is working to minimize the impact on supply chains, even as the government is prepared for some decline in exports and imports.

Agrawal emphasized that even if the war ends, the impact of the crisis will be felt for several months or years, depending on which supply chain or infrastructure has been affected. Therefore, it will be challenging to take a long-term view on the situation.

To combat these external challenges, Agrawal suggested that the industry should become self-reliant. The government is already engaged in efforts to prioritize the limited supply of LPG, with some success achieved through diversifying imports and buying from other sources.

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The commerce secretary also highlighted the importance of making supply chains more resilient, with the industry and government working together to address this issue. The pharma sector will be one of the priority sectors in resolving the supply chain issues, Agrawal noted.