As tensions between Israel and Iran threaten to disrupt global supply chains, Union Commerce Ministry will hold a meeting of key stakeholders this week to assess the threat the conflict poses to international trade. The meeting will see the participation of the representatives of shipping lines, container companies, exporters, insurance companies and related government departments, a senior ministry official said.

“We are watching the conflict from the perspective of trade. We have meeting export promotion councils regularly”, the official said.

Delhi based policy think tank Global Trade Research Initiative (GTRI) had warned that India may soon face disruptions in import and export of oil and other goods if Israel-Iran conflict escalates. The fear is that the key maritime trade route including the strategic Strait of Hormuz could get blocked compelling goods movement to take the longer sea route delaying delivery and increasing costs. Located between the Persian Gulf and the Gulf of Oman, Strait of Hormuz, a waterway just 21 miles wide at its narrowest point serves as the sole sea passage for over a fifth of global oil trade. Iran has recently threatened to close it, which could have a major impact on India’s economy. In FY2025, India exported goods worth $1.24 billion to Iran and $2.15 billion to Israel, while imports stood at $441.9 million from Iran and $1.61 billion from Israel. But more importantly, nearly two-thirds of India’s crude oil and half of its liquefied natural gas (LNG) imports travel through the Strait of Hormuz.

In a separate move to tackle another problem that is harming trade, the Ministry also is engaged with the Automotive Component Manufacturers Association of India and The Society of Indian Automobile Manufacturers (SIAM) to facilitate discussions with their Chinese counterparts to find an early solution to the shortage of rare earth magnets faced by Indian companies. The shortage of this critical component in auto manufacturing was triggered by the export restrictions announced by China on certain critical minerals. A ministry official said the government is engaging with commercial entities as well as diplomatic channels to ensure supply of essential materials is not stopped.