Not India's War, But India's Problem

US, Israel Attack Iran: What It Means For India

By Kudrat Wadhwa

What?

A precision US-Israeli airstrike killed Iran's Supreme Leader Ayatollah Ali Khamenei, 86, in his Tehran office, Iran confirmed early morning on Sunday, March 1.

US President Donald Trump confirmed the operation publicly. Iranian authorities declared a 40-day national mourning period.

A day earlier, an Israeli strike reportedly hit a school in southern Iran's Minab region, killing over 100 people. Iran retaliated, launching missiles and drones at Israel—mostly intercepted with minimal damage—and striking US military bases in Bahrain, UAE, Kuwait, and Qatar.

Several countries, including the United Arab Emirates (UAE), temporarily restricted airspace, forcing airlines to cancel or reroute flights across the Middle East. The Dubai international airport, one of the busiest hubs for Indian travellers, suspended all flight operations until further notice.

In India, the Ministry of Civil Aviation (MoCA) confirmed that domestic carriers cancelled 410 flights on February 28 and would cancel another 444 on March 1 because of ongoing airspace closures in the Middle East. The Directorate General of Civil Aviation (DGCA) instructed Indian airlines to avoid 11 affected airspaces over Iran and the wider Middle East and to coordinate rerouting to ensure passenger safety.

Why?

The escalation marks a dramatic shift from shadow conflict to open confrontation.

Israel has long accused Iran of advancing its nuclear programme and arming regional proxy groups. Diplomatic efforts to revive nuclear negotiations stalled in recent months, and military signalling intensified before the strike.

Indian Prime Minister Narendra Modi visited Israel's Knesset just days earlier, reiterating India-Israel's shared resolve to combat Islamic terrorism while deepening defense, tech, and counter-terrorism cooperation. 

But, once the attacks on Iran began, India swiftly condemned the escalation, called for de-escalation, and launched emergency evacuation operations for thousands of Indian students and workers trapped in Iran.

Why It Matters?

After the strikes, Iranian military authorities issued warnings to commercial vessels in and around the Strait of Hormuz, cautioning ships against transiting high-risk areas.

Energy markets treat the Strait of Hormuz as the world’s most critical oil chokepoint. The narrow passage between Iran and Oman carries roughly 20% of global seaborne crude and a significant share of liquefied natural gas exports from Qatar. Even limited disruption can tighten supply within days.

Bloomberg reports that shipping and tanker operators have begun avoiding the waterway, with vessels holding outside the strait or reversing course after military warnings. Major traders have delayed or suspended some crude and LNG shipments, and naval authorities have advised commercial traffic to steer clear of high-risk zones.

For India, the consequences are immediate. The country imports more than 90% of its crude oil, and roughly 40-50% of those volumes transit Hormuz, largely from Iraq, Saudi Arabia, the UAE and Kuwait. A sustained $10 rise in crude prices would add billions to India’s annual import bill, widen the current account deficit and put fresh pressure on the rupee.

New Delhi must also navigate diplomatic risk. India maintains deep defence and technology ties with Israel while depending heavily on Gulf energy supplies and hosting millions of Indian workers across the region.

Khamenei’s death reshapes regional politics. But the global impact still hinges on oil flows. If shipping stabilises, markets may calm. If disruption deepens, India will face higher import costs and currency risk, in addition to a complicated diplomatic calculus. The military exchange may fade. The economic shock could endure.

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