Prime Minister Narendra Modi on Monday signalled a calibrated and proactive response to emerging geopolitical risks in West Asia, underscoring India’s efforts to secure uninterrupted energy supplies amid escalating tensions around the Strait of Hormuz. Addressing the Lok Sabha, Modi stated that the government is in continuous engagement with global energy suppliers to ensure steady access to crude oil, natural gas, and LNG.

India’s concern is rooted in its structural dependence on energy imports, particularly from the Gulf region, which remains a critical corridor for both crude shipments and liquefied natural gas. The Strait of Hormuz, a narrow yet strategically vital maritime chokepoint, handles a significant share of global oil trade. Any disruption in this region has immediate implications for price volatility and supply continuity.

Modi highlighted that India has expanded its energy sourcing footprint meaningfully over the past decade. From importing energy from 27 countries earlier, the number has now risen to 41, reflecting a deliberate diversification strategy. This shift is aimed at reducing concentration risk and improving bargaining leverage in global energy markets. The government is also working on increasing domestic LPG production, indicating a parallel effort to strengthen internal supply buffers.

The Prime Minister acknowledged that the situation in West Asia remains “worrisome,” with the ongoing conflict extending beyond three weeks and beginning to impact both global markets and everyday economic activity. He emphasised that ensuring uninterrupted availability of petrol and diesel remains a policy priority, particularly in a scenario where supply chains could face logistical or geopolitical disruptions.

India’s stakes in the region extend beyond energy. Modi noted that nearly one crore Indians reside in Gulf countries, contributing significantly to remittance inflows. Additionally, Indian maritime personnel are actively engaged in commercial shipping operations in these waters, adding a human and economic dimension to the geopolitical risk exposure.

From a policy standpoint, the government’s messaging reflects a dual-track approach. On one hand, there is a clear emphasis on supply-side resilience through diversification and domestic production. On the other, there is an implicit attempt to manage demand-side expectations by assuring households of minimal disruption. Modi’s statement on “minimising inconvenience to households” suggests that price stability and fuel availability remain key political and economic priorities.

For Indian markets, the developments carry both immediate and medium-term implications. Energy import dependency means that any sustained disruption or escalation in West Asia could translate into higher crude prices, widening the current account deficit and exerting pressure on the rupee. Sectors such as oil marketing, aviation, paints, and logistics are particularly sensitive to input cost fluctuations linked to crude.

At the same time, India’s expanded supplier base could act as a mitigating factor. By sourcing from a wider pool of countries, including non-traditional partners, India may be able to partially cushion supply shocks or negotiate more favourable terms during periods of volatility.

From a sectoral perspective, upstream energy companies could benefit from elevated crude prices, while downstream companies may face margin pressures if retail prices are not adjusted in line with global trends. The government’s stance on protecting consumers could, therefore, influence profitability dynamics within the oil marketing ecosystem.

The broader geopolitical backdrop also introduces uncertainty into global trade flows and shipping costs. Insurance premiums for vessels operating in high-risk zones tend to rise during conflicts, which can indirectly increase landed costs of crude and LNG imports. This could have second-order effects on inflation and industrial input costs in India.