India needs to be alert to the spillover effect of Pakistani conflict

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Since the Palestinian Islamic Islamic resistance (Hamas) launched an attack on Israel on October 7, Israel launched a large -scale military operation against Hamas.After that, the tension in the Middle East continued to upgrade.On October 26, the Israeli National Defense Force attacked the large -scale ground on Gaza, and Palestinian -Israel's conflict entered a new stage.Saudi Arabia announced the suspension of normalization with Israel. Qatar asked Israel to stop military operations, otherwise it would "disconnect" natural gas.The development of conflicts has aroused the attention of other issues related to this, including the energy supply of the Middle East, the Suez Canal Navigation and the conflict of ethnic conflict.In this context, Indian scholar Subrata Malo Hedo pointed out that although the Indian government had a flexible response to the Palestinian -Israeli conflict, the spillover effect of the conflict was still worrying.Jinnai Wealth Management

Ma Hedo first pointed out that although Pakistani is not India's major trade and investment partners, the continuous expansion of conflicts may affect the relationship between India and other Arab countries.Ma Hedo believes that the Arab country is an important economic partner of India.If the conflict continues to expand, Arab countries may use oil supply as a means of economic deterrent.At present, 90%of Indian consumption of crude oil depends on imports, of which 55%of imported crude oil comes from the Arab countries.Petroleum trade is an important position in India's import and export trade.Crude oil accounts for the largest share of India's import, and nearly one -fifth of India's total imports are crude oil imports.The impact of conflict on Indian crude oil imports may have a chain reaction on India's balance of payments in international revenue and expenditure.When oil prices rose, the trade deficit expands.The continuous upgrading of the trade deficit has adversely effectively affecting the balanced account balance.Whenever the trade deficit expands, account imbalances often expand.This puts greater pressure on foreign exchange reserves.More importantly, because the main Arab oil supply countries and Palestine are all Sunni countries, these Arab oil supply countries are more likely to intervene in conflict.This will lead to the potential risks of India facing the outbreak of the oil crisis.Agra Investment

Secondly, Ma Haoude believes that due to the impact of Russia and Ukraine's influence on India -Russian oil trade, Pakistani conflict on the potential threat of Indian crude oil imports is currently limited.Since the outbreak of the Russian and Ukraine War, India has increased from oil imports from Russia.In 2023, India increased by 72%from Russia's crude oil imports, accounting for 16%of Indian crude oil imports, and only 2%in 2022.As Russia provided preferential prices to India in the export of crude oil, imports of Russian crude oil made India save a lot of foreign exchange reserves.In the first nine months of 2022-23, the price of Russian crude oil was minimized. The average price of oil imported from Russia was $ 87.7/barrel, and the average price of oil imported from Saudi Arabia was $ 101.5/barrel.The price of $ 95.4/barrel, the average import price imported from Iraq is $ 92.6/barrel.Because of this, India has saved $ 3.6 billion in foreign exchange 2022-23 fiscal year.

Third, Ma Hone believes that India also needs to be alert to the impact of Palestinian conflict on the Indian supply chain.If Egypt intervenes in Palestinian -Israeli conflict, the Suez Canal may face the risk of blocking.The economic loss caused by conflicts to Egypt may also affect the transportation of Indian commodity trade.For a long time, the Suez Canal has had an important position in the trade between India and the United States, Europe and Latin America.The goods worth more than $ 200 billion each year through the Suez Canal, accounting for 20%of India's total trade.Therefore, if Egypt intervenes in conflict, India's exports and supply chains may face serious impact.

In the end, Ma Hedo also proposed other impacts of Pakistani conflict overflow effects on India.If the conflict continues to ferment, the fate of thousands of Indians working in the Middle East is worrying.Nearly 66%of Indian overseas Chinese settled and worked in the Gulf countries, most of which are engaged in building infrastructure, petroleum and petrochemical industries.The expansion of conflicts will affect their livelihood.Ma Hedo pointed out that the threat of the Arab world's intervention in Pakistani seems to be imminent, and the question is whether the Arab countries will really intervene.Since the outbreak of the conflict for more than 20 days, there have been no Arab countries to declare war on Israel, and Iran, who has actively stated in the conflict, has not declared war on Israel.Therefore, the intention of the Arab countries to intervene in Pakistani still needs to continue to observe.

(Editor of Sun Xiaohan: Zhu Jiacong)Surat Investment

The original text was published on October 28 on Eurasian Review Website

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