How rising tension between US-Iran after Soleimani's killing will affect India

WION Web Team New Delhi, Delhi, India Jan 03, 2020, 05.38 PM(IST)

File photo. Photograph:( Reuters )

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The Soleimani's killing triggered various reactions from across the world and while some Republicans lauded the move other world leaders warned of danger and urged US and Iran for restraint.

A dramatic escalation came in US-Iran tensions after the United States killed Qasem Soleimani, the head of the elite Quds Force in a strike at Iraq's Baghdad airport on Friday. An advisor to Soleimani, Muhandis was killed in the strike.

The Soleimani's killing triggered various reactions from across the world and while some Republicans lauded the move other world leaders warned of danger and urged US and Iran for restraint.

So what does this escalation of tensions mean for India?

India heavily depends on crude imports from West Asian nations and the country's slowing economy could be further dented by the spike in crude oil prices owing to the instability.

US-Iran tensions have the potential to heavily and adversely affect stability in the region. The region supplies to a third of the world's oil demand. But while it is not just Iraq, but experts opine that most of the West-Asian nations will either align for or against the United States if the situation does not de-escalate.

According to a report, a 10 dollar rise in crude oil prices will increase India's import bill by 15 billion dollars . a confrontation of this nature has the potential to drag down other such oil-producing countries.  

Also, India is one of the world's top recipients of external remittances. Looking at 2017 figures from the reserve bank of India, India received 69 billion US dollars worth remittances.

What can be concerning for India, owing to the escalation of tensions, is that over 50% of the remittances come from countries like Saudi Arabia, United Arab Emirates, Qatar and Oman, countries that could potentially be affected by the developing situation.

Substantial population from Indian states like Kerala, Maharashtra, Karnataka and Tamil Nadu look to West Asian countries for better job opportunities. The tensions could affect the prospects of aspiring and existing Indian migrant workers.