Escalation in Israel-Palestine war could affect India’s trade, diplomatic stance: Experts

Palestine-based terror outfit Hamas’ deadly attack on Israel on Saturday and Israeli Prime Minister Benjamin Netanyahu’s consequent declaration of war is likely to affect India’s trade and diplomatic stance with the region. However, the seriousness of the impact will depend on how long the escalation continues, say experts.

“India’s trade with Israel, at about $10.7 billion in FY23, may be seriously impacted if operations at the three largest ports of Israel-Haifa, Ashdod; and Eilat are disrupted. These ports handle shipments in agricultural products, chemicals, electronics, machinery, and vehicles. India’s merchandise trade with Israel happens mostly through the Eilat port, located on the Red Sea. Fortunately, so far there is no report of port disruption. The real impact would depend on the duration and intensity of the war,” said Ajay Srivastava, former Indian Trade Service officer, and Founder, Global Trade Research Initiative.

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About 1,000 people have already been killed since the Hamas group launched its multi-front attack by land, air and sea, on Israel on Saturday, with over 600 killed on the Israeli side and about 370 in Gaza, according to reports from the region.

India is striving to bring back its stranded students from Israel, and the PMO is strictly monitoring the situation there, Union Minister of State for External Affairs Meenakshi Lekhi told reporters on Sunday. All Indian nationals have been asked the Indian Embassy in Israel to remain vigilant and observe safety protocols. 

An escalation in the Israel-Hamas confrontation may not just hit India’s trade with Israel, especially in critical items such as defence equipment, but also pose a serious challenge to India’s diplomatic efforts in case other Arab countries get involved.

Prime Minister Narendra Modi has expressed deep shock at the attack, and said that India stood in solidarity with Israel, but some say that if the war continues for long, India’s diplomatic stance could get complicated. 

• Also Read: Israel-Hamas clash raises questions about regional security alignment and Iran’s influence

“If the Arab world gets pulled into this dispute, which has happened in the past, then India will have to measure its steps. India’s economic and strategic ties with the Middle East have become even more important in the light of the India-Middle East-Europe economic corridor. In case the war intensifies, India has to tread carefully,” said Biswajit Dhar, Distinguished Professor, Council for Social Development.

A direct conflict between Hamas and Israel may not impact India, but if other actors like Hezbollah and Iran get involved security and stability of the West Asian region will be terribly impacted which will have direct consequences for India’s energy supply ,economy and investment  and welfare of Expats, said Anil Trigunayat, Former Ambassador of India to Jordan, Libya and Malta.

“While PM Modi has expressed solidarity with Israeli people in the wake of these unprecedented Hamas attacks, India’s position on the Palestinian issues and relations with them have remained robust . It is also an imperative that given the intensity of the conflict this time and perhaps in future too the international community must take the Palestinian issue seriously,” he said.

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