‘My children did not attack Iran’: 2bn South Asians suffer from distant war

What Happened

Escalating regional conflict in the Middle East is driving a significant cost-of-living crisis across South Asia, as supply chain disruptions and energy price volatility impact India, Pakistan, Bangladesh, and Nepal. These nations, which rely heavily on energy imports from Gulf producers such as Iraq, Saudi Arabia, the UAE, Kuwait, and Qatar, are experiencing sharp increases in electricity, gas, and fuel costs. The economic strain has forced households in cities like Karachi, New Delhi, and Dhaka to reduce food consumption, relocate family members, and withdraw children from education due to the rising financial burden.

Key Actors

Why It Matters

The situation demonstrates how the expansion of conflict in the Middle East and the potential choking of maritime supply routes through the Strait of Hormuz create immediate, tangible economic instability for non-combatant nations. For South Asian economies, the reliance on Gulf energy creates a direct transmission mechanism for geopolitical shocks, disproportionately affecting low-income populations and threatening long-term social development indicators.

Watch For

Monitor for further fluctuations in global crude oil and LNG prices, potential shifts in South Asian energy import strategies toward non-Gulf suppliers, and domestic policy responses from the governments of India, Pakistan, and Bangladesh aimed at insulating vulnerable populations from inflationary pressures.