Global Sanctions and Geopolitical Conflicts Affect 15 Key Sectors in India

Over the past two decades, global sanctions and geopolitical tensions have disrupted economic systems worldwide. India has not been immune to these effects, with 15 critical sectors, including semiconductors, petrochemicals, transportation, and travel, experiencing significant setbacks. These disruptions have influenced India's economic growth and its efforts to meet strategic development goals.

Impact on India’s Key Sectors
India’s economy has faced challenges due to international sanctions imposed by various countries. Sectors such as agriculture, electronics, finance, food and beverages, petroleum, shipping, and tourism have been particularly affected. A detailed analysis shows:
•    Semiconductor Industry: India’s ambitions to establish semiconductor manufacturing units have been hindered due to trade restrictions and geopolitical challenges. The delays have impacted India’s efforts to become self-reliant in technology production.
•    Petrochemical and Oil Trade: Indian oil companies have struggled to recover payments stuck in global financial systems due to sanctions. This has particularly affected investments in oil imports and refinery projects.
•    Chabahar Port Development: The Chabahar port project in Iran, a key part of India’s regional trade strategy, has faced hurdles despite a 10-year agreement signed in 2024 for its expansion and operation. Sanctions from the US and other countries have further complicated the project's implementation, delaying its progress since its initial discussions in 2003.
Geopolitical Context
The ongoing Russia-Ukraine conflict and escalating tensions in the Middle East have disrupted global supply chains, affecting oil prices and trade flows. These issues have compounded India’s challenges in maintaining energy security and fostering trade relations.
India’s reliance on international trade has also exposed its industries to fluctuations caused by geopolitical uncertainties. For instance, trade with sanctioned countries often results in delays and higher costs, impacting sectors like defence, technology, and consumer goods.

A Broader Perspective
The report highlights the need for India to diversify its trade partnerships and strengthen domestic industries to mitigate the impact of such disruptions. A focus on self-reliance in sectors like semiconductors, renewable energy, and defence manufacturing is critical to reducing dependence on global supply chains.

Future Outlook
As India continues to navigate these challenges, strategic planning and diplomatic negotiations will play a key role in minimizing the adverse effects of global sanctions. With ongoing efforts to bolster key industries, India aims to achieve its long-term economic and strategic objectives despite the prevailing geopolitical complexities.