India may be headed for a sharp rise in its import bill and renewed inflationary pressures if the conflict in West Asia continues, according to an internal assessment prepared by the Directorate General of Shipping (DG Shipping), sources told NDTV Profit. The agency is expected to make a detailed presentation to the Cabinet Secretariat shortly, outlining the macroeconomic risks stemming from elevated crude oil prices and regional disruptions.
DG Shipping's preliminary estimates suggest that India could face an annualised import hit of Rs 30,000-50,000 crore if crude oil prices remain high. The note warns that the country's trade deficit may widen by $5-10 billion per quarter in the near term, driven by rising energy costs and supply chain disturbances.
The assessment also indicates that wholesale price index-based inflation could climb 0.3-0.7%, while exports may face a 2-4% impact due to weakening global demand and logistics hurdles. Shipping and logistics costs, normally 13-14% of GDP, could temporarily spike to 14-15%.
While the short‑term impact is seen as manageable, the agency has cautioned that if tensions in the region persist for another two to three months, India could face more pronounced risks, including steeper import costs and broader macroeconomic strain.
Since the outbreak of the Iran war, energy prices have shot up to multi-year highs. India's trade with the GCC region have been hit due to the blockade of the narrow Strait of Hormuz waterway.
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