New Delhi, India — April 14, 2026
India could see a sharp rise in poverty levels as the ongoing military conflict in West Asia disrupts global energy supplies and trade flows, according to a new report by the United Nations Development Programme.
The report warns that approximately 2.5 million people in India could be pushed into poverty, highlighting the growing economic vulnerability triggered by geopolitical tensions.
Poverty and Development Under Pressure
Titled “Military Escalation in the Middle East: Human Development Impacts Across Asia and the Pacific,” the report estimates that 8.8 million people globally could fall into poverty, with South Asia bearing the largest share.
In India, poverty levels are projected to rise from 23.9% to 24.2%, adding nearly 2.46 million people to the poverty bracket.
The report also warns of a setback to India’s Human Development Index (HDI), with a potential loss ranging from 0.03 to 0.12 years in development progress.
Energy Dependence Exposes Economic Risks
India’s heavy reliance on imported energy makes it particularly vulnerable to disruptions in West Asia.
- Over 90% of India’s oil needs are imported
- Around 40% of crude oil and 90% of LPG imports come from the region
Any supply shock or price surge could significantly increase inflation and widen the trade deficit.
Trade and Supply Chains Disrupted
The report highlights rising freight costs and insurance premiums, which are already disrupting global supply chains.
India’s $48 billion non-oil export sector is at risk, including:
- Basmati rice
- Tea
- Gems and jewelry
- Textiles and apparel
Experts warn that prolonged disruption could weaken export competitiveness and economic growth.
MSMEs and Jobs at Risk
The crisis is expected to hit India’s informal sector the hardest, where nearly 90% of the workforce is employed.
Small and medium enterprises (MSMEs) are facing:
- Rising input costs
- Supply shortages
- Reduced working hours
- Potential layoffs and closures
Sectors such as hospitality, food processing, construction materials, and gem manufacturing are particularly vulnerable.
Healthcare Costs Rising
Disruptions near the Strait of Hormuz are expected to increase the cost of raw materials for medical equipment by up to 50%.
Meanwhile, wholesale prices of medicines have already risen by 10–15%, raising concerns over healthcare affordability.
Food Security and Agriculture Concerns
India imports more than 45% of its fertilizers from West Asia. Any prolonged disruption could affect the upcoming Kharif (monsoon) crop season.
While a buffer stock of 6.1 million tonnes of urea offers short-term relief, experts warn of potential long-term risks to agricultural output and food security.
Remittances May Decline
Nearly 9.37 million Indians working in Gulf Cooperation Council (GCC) countries contribute 38–40% of India’s total remittances.
Economic slowdown in the region could reduce income flows, directly impacting household consumption and financial stability in India.
Policy Response and Outlook
Kanni Wignaraja, Assistant Secretary-General of the United Nations, emphasized the need for urgent policy action.
She recommended:
- Strengthening social protection systems
- Diversifying energy sources
- Improving food security frameworks
Experts say the crisis is no longer just geopolitical — it poses a direct threat to India’s growth, employment, and inflation outlook.
