Amidst the increasing tension in West Asia and gas shortage in the country, New Delhi is continuously taking steps to deal with the situation. Faced with the looming threat of an economic crisis, Prime Minister Narendra Modi is in talks with Iran; Additionally, India also wants to maintain strong relations with America. A prime example of this diplomatic maneuvering is the passage of two Indian LPG tankers through the Strait of Hormuz. Following the joint air strikes by Israel and the US on Iran, the Strait of Hormuz was completely closed for the last two weeks. However, amidst this conflict zone, currently only India, China and Russia have been allowed to use this route.
India’s efficient diplomacy
Although India initially maintained silence following the US attacks on Iran, New Delhi later intensified its diplomatic initiatives as it realized the growing impact of the conflict on global energy and financial markets. India is one of the largest importers of LPG in the world, and the acute shortage of this fuel is being keenly felt amid the current conflict. While LPG is primarily used as a cooking gas in homes, it is also used extensively for various industrial purposes. Moreover, India imports about 90 percent of its crude oil needs. As a result, inflationary pressure has further increased with crude oil prices crossing $100 per barrel. Additionally, the Indian currency has also reached its lowest ever level against the dollar.
India is dealing with a dual challenge
On one hand, India has reached out to Iran; On the other hand, it is committed to maintaining strong relations with its close strategic and economic partner—the United States—despite the current conflict. Earlier this month, the US, moving away from its previous stance, gave some concessions to India in purchasing oil from Russia. Earlier, the Donald Trump administration had imposed an additional 25 percent tariff on India as a punitive measure for buying oil from Russia at concessional rates. The US is also the largest export market for India; Following a recent trade agreement, President Trump announced reductions in some tariffs already imposed on India. According to international experts, India is currently moving forward with a balanced approach. According to Nitin Pai, founder of Takshila Institution (a Bengaluru-based think tank), the passage of Indian LPG tankers through the Strait of Hormuz is a direct indication that New Delhi’s diplomacy is working.