They wage the war, we pay the price

March is usually the season when the first aroma of ripening Alphonso mangoes wafts through the orchards of the Konkan belt. In Maharashtra, Gujarat and parts of coastal Karnataka, the arrival of the mango season normally signals prosperity. Exporters begin to pack consignments for the Gulf, farmers anticipate good prices and traders prepare for the busiest weeks of the year.

This year, however, the mood in the mango belt is unusually gloomy. Growers and exporters say the war in West Asia has already begun to disrupt trade. The Gulf Cooperation Council (GCC) countries are the biggest buyers of Indian mangoes — in 2024, India exported nearly 12,000 metric tonnes of mangoes to the region. This year, orders have simply not come. A Surat-based fruit exporter summed up the situation bluntly: “Not a single order for mangoes has been received so far. And frankly, there is no hope at least for the next month.”

The anxiety is spreading across the entire mango market. Farmers who grow mangoes mainly for domestic sale are equally worried. Once export demand collapses, they say, the domestic market is flooded with surplus fruit and prices crash.

The mango crisis is only the beginning. Even before the mango season has fully started, watermelon farmers have already been hit by the war’s ripple effects. Export data from 2023 shows India shipped about 2.2 lakh kg watermelon to the Gulf region, particularly during the month of Ramzan, when demand peaks. This year, the numbers tell a different story. Up until March, exports were negligible. Ramzan came and went with virtually no shipments.

For farmers who depend on export-linked crops, the sudden disruption has come as a shock. A farmer leader told National Herald that the sector was already struggling to understand the implications of the new Indo-US trade agreement, when the war added another layer of uncertainty.

The Gulf region is not just a market for fruits. It is one of the largest buyers of Indian basmati rice, tea, spices and processed food products. A prolonged disruption in trade could therefore hurt millions of farmers and workers across the agricultural supply chain.

Agricultural produce is only one part of the picture. The Gulf region is also a major destination for India’s gems and jewellery industry, which employs millions of workers in cities like Surat and Mumbai. If the conflict persists, exporters fear a sharp drop in orders. Pharmaceutical companies are also worried. Industry estimates suggest that bulk drug exports from India could fall by 20-30 per cent if trade routes remain disrupted and demand weakens.

Jobs will inevitably be affected. Export-oriented sectors typically support a large number of contract workers and small suppliers. When exports decline, the first response of businesses is often to cut costs through layoffs or reduced working hours.

The result could be rising unemployment for both full-time and part-time workers, particularly in rural areas and among informal workers who are already vulnerable.

The war is also triggering a less visible but potentially more dangerous crisis for Indian agriculture: fertilisers.

India imports a large share of its fertiliser requirements, especially phosphatic fertilisers such as Di-Ammonium Phosphate (DAP). In recent weeks, the international price of DAP has surged sharply, rising from around $665 per tonne to more than $730 per tonne within a fortnight. The spike is driven by supply disruptions and rising demand in the global market. For India, which must secure large quantities before the kharif sowing season, the timing couldn’t have been worse.

Although the government keeps the retail price of DAP fixed at Rs 1,350 per 50-kg bag through subsidies, the real problem is availability. If imports are delayed or insufficient, farmers may have to depend more heavily on urea, leading to nutrient imbalance in soils and lower crop productivity.

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Energy imports are perhaps India’s most serious vulnerability during a global conflict. The country imports about 85 per cent of its crude oil requirement, and any sharp rise in prices immediately affects inflation and the current account deficit. Economists estimate that every $10 increase in crude oil prices can widen India’s current account deficit by roughly $9 billion.

For now, the government has assured Parliament that India holds adequate petroleum reserves. However, the situation remains uncertain. A temporary waiver from the United States has allowed India to continue buying oil from Russia for a limited period, but such arrangements depend heavily on geopolitical decisions beyond India’s control.

If the war drags on, energy costs could rise sharply, affecting transport, manufacturing and household expenses.

The most immediate crisis is natural gas. India depends heavily on imports of liquefied petroleum gas (LPG) and liquefied natural gas (LNG). Much of this supply travels through the Strait of Hormuz, a strategic shipping route that handles a large share of global energy trade.

Any disruption there affects cooking gas, CNG transport fuel and industrial gas supply in India.

The shortage can already be seen in unexpected places. Several restaurants and catering businesses across cities have reportedly reduced operations or shut down temporarily for lack of LPG. This in turn affects workers ranging from cooks to delivery personnel in the gig economy.

If the conflict drags on for months rather than weeks, the consequences for the Indian economy could be profound. Export-oriented sectors may face prolonged demand shocks, forcing businesses to rethink supply chains and markets. Higher energy prices could push up inflation, forcing the central bank to maintain higher interest rates for longer. That would slow investment and economic growth.

Disruptions in fertiliser supply and rising agricultural costs could intensify rural distress and affect food security. Finally, geopolitical instability in West Asia may threaten remittances from millions of Indian workers employed in the Gulf, which are a major source of foreign exchange for India.

The most alarming estimate comes from the US-based think tank SolAbility, whose report suggests that if the conflict in the Gulf persists, the long-term impact could reduce India’s GDP by as much as 1.7 per cent, largely due to disruptions in LNG supplies and a deepening fertiliser crisis.

Wars may be fought thousands of kilometres away, but their economic consequences are felt closer home. From mango orchards in Konkan to restaurants in Delhi, from fertiliser imports to energy supplies, the ripple effects travel through trade routes, commodity markets and supply chains.

The fate of the Alphonso crop this season is a stark reminder that even the sweetness of mangoes can be overshadowed by the bitterness of a distant war.