Israel-Hamas war: India's $12b trade at stake

It is not business as usual for Indian industry and trade amidst an escalating Israel-Hamas conflict as businesses and markets gear up for the real impact on outbound and inbound transactions, flow of goods and services and deals, clouded by uncertainties on the duration and intensity of the war.

- NIVEDITA MUKHERJEE

At stake is the India-Israel bilateral trade in merchandise and services sectors which in FY 2023 is estimated to be USD12 billion, according to GTRI. The India-Israel bilateral services trade of an estimated USD 1.3 billion could be impacted if the war spreads wider to involve bigger parts of Israel. The key worry, though, is over India's merchandise exports to Israel and imports, which for FY2023 were USD 8.4 billion and USD 2.3 billion respectively, leading to a merchandise trade surplus of USD 6.1 billion.

While the jury is still out on the enormity of the damage that the situation can inflict on commerce and business exchanges between India and Israel, the diamond trade is widely expected to bear the brunt of the hostilities. One of India's key exports to Israel is cut and polished diamonds, which amounted to USD 1.20 billion in 202223. India also imports rough diamonds to the tune of USD 519 million as well as cut and polished diamonds of USD 220 million.