economy
March 6, 2026
Inside India newsletter: Energy, airlines and now over $50 billion in remittances to India at risk as Middle East conflict deepens
India can't seem to escape from the fallout of the escalating conflict in the Middle East. After energy and aviation, remittances could be the latest worry.
TL;DR
- India's remittances, a significant part of its GDP, are at risk due to the escalating Middle East conflict.
- Over 9 million Indians reside in the Middle East, with the Gulf contributing nearly 38% of India's total remittance inflows ($51.4 billion in FY2025).
- Indian workers are employed in sectors vulnerable to disruption, such as oil services, construction, hospitality, and retail.
- A sharp decline in remittances, especially combined with higher oil prices, could worsen India's external position and pressure the rupee.
- Experts suggest a prolonged conflict beyond six months could have a material impact on the Indian economy.
- In the short term, 'risk aversion' might lead to more repatriation, a perverse positive impact on remittances.
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