New Delhi: A United Nations Development Programme (UNDP) assessment has warned that the ongoing military escalation in West Asia could push nearly 2.5 million people in India into poverty and slow down human development gains across the Asia-Pacific region.
Titled ‘Military Escalation in the Middle East: Human Development Impacts Across Asia and the Pacific’, the report maps how disruptions in energy routes, shipping lanes and trade networks are affecting economies that depend heavily on imports from the Gulf region.
Rising poverty risk across Asia
Add Zee News as a Preferred Source
According to the UNDP estimates, across the world, the number of people at risk of falling into poverty due to the standoff could rise to 8.8 million in the most severe scenario. South Asia accounts for the largest share of this impact because of its population size and exposure to price shocks.
The report projects an increase in poverty in India from around 4 lakh people to nearly 2.5 million under stress conditions. It also estimates a rise in India’s poverty rate from 23.9 percent to 24.2 percent in a high-impact scenario, pushing more than 24 lakh additional people below the poverty line.
The report adds that the country could see a loss of 0.03 to 0.12 years of human development progress depending on how long disruptions continue.
Energy and trade pressure at the core
One of the main drivers behind this impact is India’s heavy dependence on West Asian energy supplies. The report says that more than 90 percent of India’s oil requirements are met through imports, with over 40 percent of crude and nearly 90 percent of liquefied petroleum gas sourced from the Gulf region.
West Asian countries also supply over 45 percent of India’s fertiliser imports. Around 85 percent of domestic urea production depends on imported regasified LNG. This links agricultural input costs directly to international energy prices.
As LNG prices rise, several countries, including India, have increased reliance on coal-based power generation to manage energy demand.
Trade disruptions and supply chain stress
The UNDP report also highlights disruptions in international shipping and trade flows linked to higher freight charges, war-risk insurance premiums and rerouted supply chains. In 25 out of 36 countries analysed, these pressures have affected both consumer goods and industrial inputs.
India’s trade exposure is also high. West Asian markets account for around 14 percent of India’s exports and more than 20 percent of imports. Non-oil exports worth about $48 billion, including basmati rice, tea, gems and jewellery and textiles, are directly linked to Gulf demand.
In Bangladesh and India, flight cancellations and shipping delays have already affected cargo movement, with goods stranded due to disrupted logistics routes.
Food security and rural impact
The report points to food security risks for several South Asian countries, including India, Pakistan, Bangladesh, Nepal and the Philippines. One main factor is the possible decline in remittances from Gulf countries, which support household consumption in many rural and semi-urban regions.
India is particularly exposed in this area. According to Ministry of External Affairs data, nearly 9.37 million Indians live in Gulf Cooperation Council (GCC) countries, and they contribute about 38 to 40 percent of India’s inward remittances.
The timing also adds pressure. The report says that any prolonged disruption could coincide with the Kharif cropping season, which begins in June. While India presently holds 6.114 million tonnes of urea stock as a buffer, the report says this may not fully absorb supply shocks if disruptions continue.
Jobs and informal economy under pressure
Employment risks are also rising, especially in sectors dependent on imported inputs or Gulf-linked trade. In India, around 90 percent of the workforce is in the informal sector, making job security more sensitive to cost fluctuations.
Small and medium enterprises in construction, hospitality, food processing, steel-based manufacturing and gems and jewellery are likely to face higher costs and delayed orders. This could lead to reduced working hours, job losses and temporary business slowdowns, especially among informal workers and migrant labourers.
Healthcare input costs are also under pressure. The report estimates a rise of up to 50 percent in raw material costs for medical devices and a 10 to 15 percent increase in wholesale medicine prices due to supply chain disruptions.
A warning on long-term stability
UNDP officials said that while the short-term risks are rising, the situation also highlights the need for stronger long-term resilience. This includes building local supply chains, improving energy diversification and strengthening social protection systems to reduce vulnerability during international shocks.
