What happens to the Indian economy if the US-Iran ceasefire doesn’t hold?

What Happened

A two-week US-Iran ceasefire was announced after Trump's warning, with Iran conditionally reopening the Strait of Hormuz. However, six weeks of conflict have damaged India's economy through oil prices, trade, remittances, and capital flows. India imports 88 percent of crude oil, with 40 percent transiting the Strait. Brent crude surged from $73 to $110, increasing India's current account deficit. The rupee weakened to 95.2 against the dollar before recovering. Indian exports to Gulf countries totalled $57 billion in FY25. Over 220,000 Indian nationals were repatriated from the region. Foreign investors withdrew $12.3 billion from Indian equities in March. If ceasefire talks fail, India faces severe economic consequences.

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