The Crisis of Foreign Policy and Global Trade Routes Due to a failed foreign policy,

 

#Indians and the Indian economy are in deep trouble today. #Challenges such as food security, currency depreciation, fiscal deficits, and the burden of subsidies are looming large over the country.

To make matters worse, amidst reports of the Strait of Hormuz already being closed, Houthi rebels in Yemen have now threatened to block the Bab-el-Mandeb Strait. 

The "blood" flowing through the veins of the global economy—oil and trade—passes through these two narrow maritime gateways. If both routes are affected simultaneously, it will not just be a regional conflict but a "global economic catastrophe."

For India, this situation poses a massive challenge because a significant portion of our economy relies on maritime trade and oil imported from Gulf nations.

The Economic Impact on India

When oil prices surge from $70 to over $110, the government's budget collapses.

Funds are diverted away from developmental work—such as roads, schools, and hospitals—just to settle the oil import bills.

#Iran holds geographical control here. Approximately 20–30% of the global oil supply passes through this strait, and the threat to close it has been Iran’s biggest bargaining chip.

This connects the Red Sea to the #Gulf_of_Aden. Trade between #Europe and #Asia via the #Suez_Canal depends entirely on this route. Houthi targets here mean a complete standstill for global container shipping.

A Recipe for Global Inflation

If both routes are obstructed at once, the consequences could be terrifying. 

#Crude oil prices could cross $100 per barrel overnight, triggering a new wave of global inflation. While energy security crises will emerge for countries like India, #China, and #Japan, #Europe will face a shortage of essential goods.

Lessons from History

If routes like Bab-el-Mandeb are closed, the movement of grain stops, potentially leading to famine-like conditions in poor nations.

The 2022 #Russia-#Ukraine war disrupted energy and grain routes, the worst effects of which were seen in economies like #SriLanka and #Pakistan, which pushed them to the brink of bankruptcy.

1973 #OilCrisis: When #Arab nations halted oil supplies, it triggered a worldwide recession, and the GDP growth of #African and #Asian countries remained stalled for years.

#History proves that whenever energy routes are in crisis, developing economies hit the hardest.

The ongoing war between Iran and the #US-#Israel alliance has reached a tipping point where the entire global economy is at stake. 

For us in #India, this disaster has already manifested in the form of a severe shortage of #LPG gas cylinders.