US-Iran Tensions Spike: India Faces Energy and Safety Risks
The United States and Iran have exchanged attacks in recent weeks, raising fears of a broader conflict. A memorandum of understanding signed between the two countries in June has unravelled, with both sides accusing each other of violations.
On Saturday, two US military personnel were killed in Jordan. The US retaliated, escalating tensions. The earlier MoU had relied on Iran's ability to control the Strait of Hormuz, through which 20% of the world's energy supply passes. The US now aims to weaken Tehran's hold on the waterway.
Iran claims that US strikes have killed at least 50 people and wounded over 500 since the breakdown of the MoU. The agreement had promised economic relief for Iran, which is crippled by sanctions. However, Iran has refused to back down, citing distrust of the US and the need to maintain control over the Strait of Hormuz as its main leverage.
Iran has attacked US military bases in neighbouring countries. It has also refused to drop the idea of charging a transit fee for the strait. According to the Institute for the Study of War (ISW), an Iranian official announced on July 18 that the government had been asked to charge fees for “environmental services” from ships, citing the UN Convention on the Law of the Sea.
Iran has adapted to US defences by using high-speed, manoeuvrable missiles against US bases. The ISW notes that Iran improved missile accuracy after previous conflicts, and now deploys cluster munitions to maximise damage.
For the US, the experience reinforces lessons from Afghanistan and Iraq: excessive force poorly applied can create more enemies. The US aims to keep the Strait of Hormuz open for free navigation.
For India, an open war poses risks to lives and the economy. Many Indians live and work in West Asia, and many serve as ship crew. Fourteen Indians have died since hostilities began on February 28, and two are missing. New Delhi has protested to both sides over the loss of Indian lives.
War also threatens economic stability. Rising energy prices have impacted Indian markets, and inflationary pressures from West Asian turmoil are already visible. India is urging both sides to return to dialogue and avoid a global economic slowdown that would particularly harm the Global South.
