The simmering tension between Iran and Israel is sending tremors in the international geopolitics with India being in a dilemma to maintain a balance between the two powers. India is also currently in the process of evacuating its nationals out of Israel and Iran and coping with the effects of a potential fall-out in trade, especially oils bought through the strait of Hormuz. This puts India in a difficult diplomatic position as it has had a long history with both countries and its strategic value in the Middle East issues. Moreover, the crisis may pose a threat to the important shipping lanes, energy security, and connectivity to India, which may affect it economically and geopolitically.

Context

• As much as the Israeli-Iran conflict is a hassle to India, it is notably a disturbance to international trade lines, demand of energy resources, and geopolitical relations in the region. 

• Maintaining relations between the two nations and evacuating its nationals will become a diplomatic tightrope.

Key Developments

The Diplomatic Respond of India

• Has no position, pushes peace and dialogue.

• PM Modi and EAM Jaishankar emphasized even relations with both countries.

• Would not join in the UN Gaza ceasefire vote, showing strategic caution.

Evacuation Efforts

• Mission Sindhu was launched to rescue ~35,000 Indian Nationals (10k in Iran, 25k in Israel).

• Iran was on board by opening the airspace to evacuation flights.

Economic Impacts

• The prevalence of India-Iran trade was reduced to India-Iran trade of only 1.4B in comparison to 14B in 2017.

• Oil prices might go up, inflation and increased shipping prices might occur, due to disruption in the Strait of Hormuz.

• Affects the energy security and competitiveness of India as an exporter.

Geopolitical Challenges

• Will have to reconcile U.S-Israel bonds with BRICS friendship, comprising Iran.

• There is speculation on the U.S- Pakistan coordination which is a risk to diplomacy.

• The BRICS summit in July could force India into clearing the air.

Threat of Regional Connectivity 

• The threat of regional connectivity is also a matter of concern. This is mostly due to the lack of information connectivity that ties it to the conveniences of the past that offers a minimum level of connectivity to the individual states.

• The Haifa Port and India-Middle East-Europe Corridor can be delayed.

• The access to Central Asia could be impeded by the Chabahar Port (Iran) development.

Vulnerabilities in energy and Remittance Energy

• West Asia provides 54% of the oil imports and 40% of the remittances.

• The economic and energy provision of India would be destabilized by any regional disturbance.

• The views of bias toward Israel can be disastrous to the India-Kenya relations in the Gulf

Conclusion

The India Israel-Iran conflict is a mixed-bag issue that runs the line between international relations, economic and geopolitical interests. Due to the vitality of energy lines, trade connectivity, and regional alliances, India needs to tread these vicissitudes cautiously. This non-position up until now, with evacuation attempts, is part of the overall policy of maintaining relations with the rest of the world as well as domestic and economic stability. Nevertheless, the conflict that continues to take place relates to the dire necessity to establish stability in the region to secure strategic interests of India in the long perspective.

In an act out of the Middle East crisis, the Brown cross Californian State and airstrikes of three main Iranian nuclear plants including Fordow, Natanz, and Isfahan were attacked by the United States using heavy bunker carrying bombs. The action, which was unauthorized by the congress and was taken after diplomacy had broken down, has been referred to by Iran as a red line activity. President Trump claimed the sites as being destroyed and the UN watchdog confirmed no radioactive leaks. The Foreign Minister of Iran declared the end of diplomacy and threatened to take revenge. To this effect, Iran parliament decided to shut down the critical strait of Hormuz which posed danger to the world oil trade.

Context

• America bombed Iranian nuclear installments and Tehran responded by harsh criticism and counter offensives. 

• Iran reacted by voting to seal the vital Strait of Hormuz increasing the chances of a broader regional war.

Key Points

U.S. Airstrikes:

• Using 30,000-pound bunker-buster bombs, strikes were carried on Fordow, Natanz and Isfahan nuclear facilities.

• President Trump was saying he is successful; assessments of damages are still in progress.

• It is not Congressionally authorized, it is a factor that concerns both legal and geopolitical issues.

Iran’s Response:

• Foreign Minister Abbas Araghchi of Iran declared the end of diplomacy and declared the strikes a violation of sovereignty.

• Iran is entitled to take the right of self-defense, and is also planning with Russia on what to do next.

• Iran accused the U.S of jeopardizing the stability of the region.

UN Watchdog Report on Nuclear:

• No radioactive short-term pollution has been recorded.

• Nuclear surveillance still goes on.

Aperture of Strait of Hormuz:

• The parliament of Iran voted to close it down awaiting a decision to be made by the Supreme National Security Council.

• The Strait of Hormuz plays an important role in oil supply to the world and India.

About Strait of Hormuz

• Location: A point interlinking the Persian Gulf and the Gulf of Oman and Arabian Sea.

• Neighboring Countries: On the north: Iran and on the south: Oman and UAE.

Strategic Importance:

• One of the world’s most crucial oil chokepoints.

• It handles about 20 percent of the world's oil.

• Width: The narrowest is approximately 33 km in width with a 2 mile shipping lane on the east and west side.

The Global Trade Impact:

• Critical to the oil export of Saudi Arabia, Iran, UAE, Kuwait and Iraq.

• Every suppression impacts on the internationally agreed price of oil.

Security Concerns:

• Become a common subject of attention as a point of strained Iran-U.S. relations, military patrols, and block the passage threats.

International Law:

• Within the UNCLOS (United Nations Convention on the Law of the Sea) – transit passage is possible.

Impact on India’s Energy Strategy After U.S. Strikes on Iran

• Oil Vulnerability

  • Approximately 80 percent of crude oil is imported into India, and much of it goes through the Strait of Hormuz.

  • Balancing can increase prices drastically, touching energy security and inflation.

• Non Concentrated Oil Sources

  • U.S., Russia, Brazil and West Africa imports now.

  • Less over-dependence on the Middle East.

• Strategic oil reserves

  • Mangalore, Padur.

  • Offers short term supply shock padding.

• Hormuz Bypass Strategy

  • Quite a number of imports are not using the Strait of Hormuz.

  • Reduces susceptibility to Iran related tensions.

• Economic Impact

  • The jump in oil prices could increase CAD, as well as weaken the rupee and cause inflation.

  • Fuel prices at the retail are likely to increase.

• Long-long-term Energy Transition

  • Greater solar, wind, biofuels, EV advocacy.

  • Strengthens Atmanirbhar Bharat in energy.

Conclusion

The U.S airstrikes represent a significant rise in tensions between the U.S and Iran which may trigger long-term unrest in the MiddleEast. As the Strait of Hormuz is quite vulnerable to cut down its operation, the international oil markets are exposed to insecurity and even an energy security setback can influence international as well as national policies of energy security by means of energy security balancing strategy and diplomatic approach.

A new Critical and Emerging Technologies Index includes 25 countries from five important areas of technology such as semiconductors, artificial intelligence (AI), biotechnology, space, and quantum. The index shows that it is well behind the leaders in this like the U.S, China, and Europe in most of such key sectors. America has a firm advantage in the U.S., specifically in AI, semiconductors and space, as China is catching up in biotechnology and quantum. India is moderately ahead of such countries as Russia and Australia but the score of 15.2 puts it below France.

Context

• With regards to key technologies such as semiconductors, AI, biotechnology, space, and quantum, India trails by a gaping margin behind the world leaders- the U.S and China. 

• This is evidenced by the Critical and Emerging Technologies Index in India which points out the weaknesses in these major sectors.

Key Developments

Overall Performance

• India ranked second last with a score of 15.2 after France, Canada and Australia.

• The U.S. is the leader in all the five sectors, China and Europe come after that.

Sector-Wise Insights

• Semiconductors (35%):

  • India is still behind Taiwan, South Korea and Japan.

  • Does not have design and manufacturing capabilities, as well as supply chains.

• Artificial Intelligence (25%):

  • U.S. leads due to R&D, skilled workforce, and private sector investment.

  • India experiences poor infrastructure and finance.

• Biotechnology (20%):

  • China makes a breakthrough in vaccinations, genetic engineering, and R & D.

  • India is promising but ought to have improved funding and innovation systems.

• Space (15%):

  • India comes 7th; Russia is in 3 rd position.

  • Delayed space budget and privatization.

• Quantum Technologies (5%):

  • China demonstrates a fast development in research and infrastructure.

  • India is not left behind on investments but lacks in implementation and global presence.

Major determinants of ranks

• Human Capital:

  • India also requires additional skilled expertise in deep-tech.

• Financing & Partnership:

  • India is trailing in the aspect of collaboration and developing with the private sector, and investment in Research and Development.

• Policy & International Influence:

  • India is not yet up to speed on all three of the above areas, which support the global leadership of tech: policy support, alliances, and innovation ecosystems.

• Strategic Gaps of India

  • Poor home ecosystem in the sectors of semiconductors and AI.

  • Under investing in biotech and quantum.

  • Provision of long term R&D finances, capacity building, and collaboration with foreign nations

Conclusion

The fact that India lags behind in the most critical technologies that include semiconductors, AI and biotechnology is becoming a big obstacle to its dream of becoming a tech superpower. The Critical and Emerging Technologies Index also underlines the necessity to promote the strategic investments, talent development, and policy change. In order to reduce the gap India has to focus on building up its technology infrastructure and enhancing international partnerships along with building domestic innovation.