NEWS: The prolonged West Asia war has significantly altered India’s trade and energy supply chains, with Singapore overtaking UAE as India’s second-largest export destination amid severe disruptions in Gulf trade routes.

CONTEXT

·         The USà remains India's largest export destination.

·         The blockage of the Strait of Hormuz (a critical maritime choke point between Iran and Oman) has forced Indian traders to find alternative logistics routes, severely disrupting traditional trade with the West Asia region.

·         The Strait previously accounted for a fifth of global oil flows.

·         Leveraging its status as a transshipment hub and its Free Trade Agreement (FTA) with India, exports to Singapore surged by 180%.

·         Exports to the UAE (another major FTA partner) dropped by 36%.

·         With traditional Middle Eastern supplies restricted, India has diversified its crude sourcing, bringing nations like Oman, Peru, and Nigeria into its top 20 import sources.

·         The global energy supply crisis has widened India's import bill and severely impacted the currency, causing the Indian rupee to fall to multiple record lows

·         To manage foreign exchange reserves and limit fuel consumption, the government has hiked the import duty on precious metals and allowed oil marketing companies to increase retail petrol and diesel prices for the first time in four years.