US-Iran Tension will severely impact Indian Economy
The Middle East is once again seen to be severely unstable. The reason for this is to kill Kasim Sulemani, the Major General and Commander of the Iranian Revolutionary Guard by the US, which has made the situation worse.
Abu Mahdi al-Muhandis , the deputy commander of the Iran-backed militia Popular Mobilization Force (Popular Mobilization Forces or PMF), has also been killed in this US attack. No one had thought about the tension that had arisen in the US-Iran Tension last year and would take such a turn in the new year. The situation is that in the Middle East once again, a situation like Gulf War has arisen. Experts believe that if this tension persists for a long time, this situation will be very bad not only for India but also for many other big countries of the world.
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According to official figures, India imported 84 percent of its crude oil from Iran in the last financial year. Thus, two out of every three barrels of total imported oil is imported from Iran. If tensions between the US and Iran remain the same, then it will have a direct impact on oil prices.
If the tension between the US and Iran turned into a war like situation, then there is a possibility of unexpected increase in oil prices, it is also likely to increase the price of consumer goods and the country’s external deficit. The result of this will be that the pace of economic development of the country may slow down and it can have a significant impact on the economy.
It will also increase the government’s fiscal deficit even further. India is already struggling to find an alternative to the Iranian barrel due to US sanctions. If the tension between the two countries increases, then it will have a direct impact on India’s economy.
According to government data, India imported about 10 percent of the oil from Gulf countries in the financial year ended in March. Currently, India has only 3.91 million barrels of oil as a reserve to use in the event of an emergency, which can last only 9.5 days. If we compare it with other countries, it is found that China is estimated to have reserves of about 55 million barrels, while the US has 64.5 million barrels of oil.
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The Indian concern does not end here; apparently India has invested millions of dollars in the Chabahar Port of Iran. India is trying to establish direct contact with Afghanistan through Iran. For this, India is helping to build the road from Iran to Afghanistan. And due to Chabahar Port, India is able to send its goods directly to Afghanistan and Iran. Apart from this India will be able to send its goods to Russia, Tajikistan, Turkmenistan, Kazakhstan and Uzbekistan with this port. It is expected that India’s trade will increasing steadily and also help India to reduce the growing trade deficit with Russia due to arms procurement.
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