Iran-Israel Conflict Strains Global Economies

The ongoing conflict between Iran and Israel has exacerbated economic challenges globally and regionally. Oil prices surged as tensions escalated, affecting economies heavily reliant on Middle Eastern oil, including India, which imports 85% of its oil from the region. This geopolitical tension has also impacted Indian companies with operations in Israel, such as Adani Ports, Tata Consultancy Services, and Sun Pharmaceutical, causing stock market declines. Additionally, the conflict has posed severe economic threats to Israel, including Moody's recent downgrade of the nation's credit rating and a slowdown in GDP growth due to war-related disruptions. Amidst these challenges, India's services exports have shown resilience, hinting at a shift in economic focus from goods to services, which may buffer against some trade disruptions.