Dr B N Tripathi
vcskuastjammu@gmail.com
The Middle East conflict is no longer just a geopolitical issue confined to oil-producing nations. Its effects are now flowing directly into farms, food systems, trade routes, fertilizer markets and household kitchens across the world. Recent assessments by the International Monetary Fund, World Bank and the United Nations Development Programme suggest that severe escalation scenarios in the Middle East could impose economic losses ranging from nearly USD 300 billion to over USD 500 billion across Asian economies due to higher energy import bills, supply-chain disruptions, inflation and weaker trade activity. IMF estimates indicate that prolonged conflict could reduce global growth to nearly 2 per cent under severe scenarios, while Asia’s growth may decline by 1-2 percentage points because the region imports almost 2.5 per cent of GDP worth of oil and gas annually.
India’s agriculture-dependent economy is increasingly vulnerable to war-driven disruptions in crude oil, fertilizers, logistics and international trade. Agriculture still provides livelihood support to nearly 46 per cent of India’s population and contributes around 18 per cent to the national Gross Value Added (GVA). Rising tensions involving Iran, Israel and the United States have already disrupted shipping movements through the Strait of Hormuz, a route that handles nearly 20 per cent of global crude oil trade and around one-third of seaborne oil movement. India imports almost 85 per cent of its crude oil requirement, making the country highly exposed to global energy shocks. Since agriculture depends heavily on diesel for irrigation, tractors, harvesting and transport, any increase in crude oil prices directly raises cultivation costs and food inflation.
India’s agricultural system is particularly vulnerable because it is closely linked to imported fuel, fertilizers and Gulf-region logistics networks. Nearly 40 per cent of India’s imports of urea and Di-Ammonium Phosphate (DAP) fertilizers are sourced from Gulf economies, while 60-65 per cent of the LNG used in domestic fertilizer manufacturing comes from the Middle East. India consumed more than 62 million tonnes of fertilizers during 2023-24, with urea alone accounting for nearly 36 million tonnes. International fertilizer prices have already shown sharp fluctuations during recent geopolitical disturbances, with DAP prices reportedly increasing by over 20-25 per cent during periods of supply uncertainty. Simultaneously, freight charges and marine insurance premiums for exports to Gulf destinations have increased significantly due to disruptions in shipping routes.
The implications for Indian agriculture extend far beyond fuel prices. Diesel constitutes nearly 15-18 per cent of operational cultivation costs in several irrigated farming systems, particularly in states dependent on tube-well irrigation. Rising fuel prices therefore increase irrigation expenses, mechanization charges, transportation costs and post-harvest logistics.In India, where urea remains central to rice, wheat, maize and horticultural cultivation, any prolonged supply disruption could significantly influence both farm income and food inflation.
Yet the impact of war on agriculture is not always straightforward. Estimates indicate that aggregate real household income may decline by over 1 per cent under severe oil-related shocks, while urban households experience the largest welfare losses due to rising living costs.The trade dimension of the conflict is becoming equally important. India exports large quantities of basmati rice, tea, marine products, fruits, vegetables and spices to Middle Eastern markets. Agricultural exports to Gulf nations and Iran are estimated at several billion dollars annually, with basmati rice alone contributing a substantial share. India exported more than 5 million tonnes of basmati rice in 2023-24, with countries such as Saudi Arabia, Iran, Iraq and the UAE among the major buyers. However, war-related disruptions are slowing shipments, increasing marine insurance costs and creating delays in export logistics. Reports indicate that consignments of aromatic rice and horticultural products have been rerouted or delayed due to shipping uncertainty in the Red Sea and Gulf region. Exporters of bananas, grapes, pomegranates and vegetables are also facing rising freight charges and air cargo disruptions as Middle Eastern airspace and shipping networks become unstable.
The implications of the conflict are especially critical for the horticulture-driven economy of Jammu & Kashmir. Horticulture contributes nearly 8 per cent to the Union Territory’s Gross Domestic Product and supports around 3.5 million people directly or indirectly. Jammu & Kashmir annually produces nearly 2.5 million tonnes of fruits, including apples, walnuts, almonds, cherries and pears. The region contributes almost 75 per cent of India’s apple production and is globally known for saffron and dry fruits. Gulf countries have traditionally remained important markets for Kashmiri apples, walnuts, almonds and saffron because of strong demand for premium horticultural products. However, rising transportation costs, shipping delays and weakening purchasing power in conflict-affected economies could adversely affect export-oriented horticulture from the region. Increased shipment time may also raise spoilage risks for perishable produce and reduce export profitability.
There is also a hidden risk emerging from trade distortion. Countries facing war related economic slowdown may reduce imports of premium horticultural products, luxury foods and high-value perishables. This could affect demand for Kashmiri apples, walnuts, saffron and dry fruits in Gulf markets, where purchasing power and logistics stability play a crucial role in sustaining imports. Moreover, prolonged conflict can increase shipping time for perishable produce, raising spoilage risks and reducing export profitability. For a region like Jammu & Kashmir, where horticulture contributes substantially to employment and rural income, such disruptions may create ripple effects across the local economy.
At the macroeconomic level, the conflict is also influencing inflation, exchange rates and fiscal balances. Every USD 10 increase in global crude oil prices is estimated to raise India’s annual import bill by nearly USD 13-15 billion. Higher fertilizer prices may also substantially increase India’s fertilizer subsidy burden, which already exceeded ?1.8 lakh crore in recent years during global commodity disruptions. Rising subsidies, inflationary pressures and trade deficits eventually affect economic growth, consumer demand and public investment capacity.
The Government of India is actively promoting balanced fertilizer usage, while Sher-e-Kashmir University of Agricultural Sciences and Technology of Jammu is conducting awareness programmes across the Jammu region on initiatives such as the Soil Health Card Scheme, nano urea promotion, Paramparagat Krishi VikasYojana (PKVY) and natural farming. The current crisis offers many strategic lessons. It has exposed India’s excessive dependence on imported energy and fertilizer systems. The need for stronger cold chains, local processing facilities and alternative trade corridors has become increasingly evident. Experts are now arguing that agriculture can no longer be viewed separately from geopolitics, energy security and global trade dynamics.A war thousands of kilometers away can influence the price of fertilizer in Punjab, the cost of irrigation in Maharashtra, the export of apples from Kashmir and the affordability of food in Indian cities.
The future of agricultural growth will therefore depend not only on rainfall and productivity, but also on how successfully India builds resilience against external geopolitical shocks. In this changing global landscape, agricultural policy must increasingly focus on self-reliance, diversified trade partnerships, efficient supply chains and strategic preparedness to protect both farmers and consumers from the economic aftershocks of international conflicts.
The author is Vice-Chancellor Sher-e-Kashmir University of Agricultural Sciences & Technology of Jammu, UT of J & K President, Indian Association of Veterinary Pathologists (IAVP)
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