Iran attacks US military bases, sends oil prices soaring. Why another conflict in the Middle-east hurts India's economic recovery.
Tomorrow is a Mystery: Today, the already-delicate situation in the Middle-east worsened. A few days ago, the US conducted an airstrike in Iraq that killed Qasem Soleimani, a senior Iranian General. In retaliation, Iran abandoned the remaining vestiges of the Iran Nuclear Deal and the Iraqi Parliament voted in favour of removing all American troops from their country. And now, Iran has hit US military bases with ballistic missiles. The bases housed American troops, but none of them were reportedly killed.
Following news of the attack - and fears of imminent US retaliation and a full-fledged military confrontation - Indian markets were off to a volatile start. Crude oil crossed $70 to a Dollar while gold hit fresh highs. Indian markets are presently trading near record highs and a 5-6% correction could be a good entry point for long-term investors, experts say. Moneycontrol
Delhi's Dilemma: An escalation of conflict in the Middle-east does not bode well for the struggling Indian economy. While India stopped importing oil from Iran, conflict in the region will spike oil prices further - which means a strain on India's exchequer since it imports its oil needs. And trade ties between the two nations have strengthened in recent years. In FY19, India’s exports to Iran shot up 18% while imports surged by 20%. Vegetables, sugar and animal fodder are the items that witnessed the highest growth in exports whereas mineral fuels, oils and chemicals remained the highest imports from Iran to India. Financial Express
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