India’s $4.5-bn Gulf electronics exports at risk as Iran–Israel conflict disrupts routes

India’s electronics and tech exports worth about 4.5 billion dollars to the Gulf could face significant disruption from the Iran–Israel conflict, not because of direct trade with Iran, but due to the region’s role as a key transit and destination hub.

The UAE is central to this risk. In April–December FY26, it bought around 4.1 billion dollars of Indian electronic goods and serves as a major consolidation and re‑export hub for smartphones, laptops, servers and components headed into West Asia and Africa. A large share of these shipments moves either over Iranian airspace or through sea routes skirting Iran, including the Strait of Hormuz, where heightened military tensions and restrictions are now driving up insurance premia and freight costs and forcing some diversions.

Exporters and logistics firms quoted in the report say spot freight rates to Gulf ports have already risen and schedules are less reliable, with some carriers avoiding high‑risk corridors and pushing cargo via longer, more expensive routes. For low‑margin electronics assemblers, this squeeze on logistics could erode competitiveness just when India’s electronics exports have been growing rapidly, helped by PLI schemes and strong demand from the US, UAE and China. If the conflict prolongs or escalates, order flows to Gulf buyers might be delayed, rerouted or partially substituted, hurting one of India’s fastest‑growing export categories.

CT Bureau