The ongoing conflict between Israel and Iran marks the most intense direct military confrontation between two Middle Eastern nations in decades. On June 13, 2025, Israel launched “Operation Rising Lion”, deploying over 200 aircraft to target Iran’s nuclear and military installations at Natanz, Tabriz, and areas near Tehran. The strikes reportedly set back Iran’s uranium enrichment programme by several years. In swift retaliation, Iran launched waves of ballistic missiles and drone swarms targeting Israeli civilian areas, prompting mass evacuations in cities like Haifa and Tel Aviv. Israel’s strategic calculus is centred on pre-emption and deterrence.
Faced with Tehran’s decade-long pursuit of nuclear weapons, Israel opted for precise air strikes instead of a prolonged ground campaign — aiming to decapitate Iran’s atomic leadership, cripple enrichment facilities, and weaken the Quds Force, the external operations arm of the Islamic Revolutionary Guard Corps (IRGC). Iran, in contrast, has relied on asymmetrical warfare: launching over 100 missiles at Israeli urban centres, mobilising its proxy networks in Syria, Lebanon, and Iraq, and deploying cyberattacks to complement its kinetic operations. Domestically, economic turmoil and rising public discontent in Iran may be pressuring Supreme Leader Ayatollah Ali Khamenei to explore diplomatic back channels, even as he publicly vows retaliation. The Israel–Iran confrontation has shaken global oil markets. In early June, Brent crude spiked nearly $10 per barrel, peaking at $78 amid fears of disruptions to the Strait of Hormuz, a critical chokepoint through which one-fifth of the world’s seaborne oil flows. The volatility underscores the fragility of energy markets, where even minor strikes on oil infrastructure can trigger disproportionate swings in futures, fuelling global inflationary pressures. For India, which imports between 80 and 85 per cent of its crude oil, such price shocks have immediate consequences. On June 13, the Reserve Bank of India intervened in currency markets as the rupee slid to a two-month low of `86.20 against the US dollar. Rising fuel costs threaten to widen the trade deficit, erode household purchasing power, and reignite inflationary pressures. Yet, India’s projected 7.5 per cent GDP growth in FY2025 provides some fiscal room to absorb external shocks.
Additionally, the Government’s proactive fuel hedging strategies and a diversified supplier base offer crucial buffers against supply volatility.
India maintains robust ties with both Iran and Israel. Tehran remains a strategic partner in energy and regional connectivity, particularly through the Chabahar Port project, which facilitates access to Central Asia despite Western sanctions. Simultaneously, India–Israel relations have flourished, with bilateral trade exceeding $7 billion, deepening defence cooperation, and intensified intelligence sharing on counterterrorism. Navigating this tightrope requires deft diplomacy to avoid alienating either side while preserving broader strategic alignments with the US and Gulf nations. India’s dual engagement underscores its commitment to strategic autonomy and multipolar diplomacy. Beyond immediate crisis management, India has the opportunity to assume a proactive diplomatic role. Leveraging its upcoming G20 presidency and leadership within the Quad, India could initiate a “West Asia Stability Dialogue” — a Track II peace process involving the Arab League, the EU, Iran, and Israel under one neutral platform. Simultaneously, fast-tracking the India–Middle East–Europe Economic Corridor (IMEC) would reinforce India’s position as a key trade and energy bridge.
Deepening partnerships in green hydrogen and solar energy with Gulf Cooperation Council (GCC) nations would also help reduce oil dependence while supporting a broader regional stability agenda.The Israel–Iran conflict illustrates the perils of unchecked nuclear proliferation and proxy warfare. For India, this is a test of diplomatic agility, energy resilience, and economic foresight, as well as a chance to assert leadership in shaping a multipolar, rules-based order in West Asia. By championing multilateralism, reinforcing strategic autonomy, and accelerating its energy transition, India can not only safeguard its national interests but also play a pivotal role in stabilising one of the world’s most volatile regions.
(The author, a socio-economic and geopolitical strategist, is based in Chandigarh. The views expressed are personal)