Mumbai, April 10 The conflict in West Asia may impact India's remittance flow, as one-third of the inflows from the diaspora come from Gulf Cooperation Council countries, according to Crisil Ratings on Friday.
The current account deficit can be adversely affected due to a reduction in the diaspora's income, it said in a note on the West Asia conflict.
"A decline in their income can have implications for India's CAD at a time when the trade deficit is already under pressure," the agency said.
India is the world's largest beneficiary of remittances from the diaspora, and received over USD 135 billion in inflows during FY25.
The country's export growth is likely to see some impact from disruptions to global trade flows due to the West Asia conflict and slower global growth, but lower US tariffs will provide some support.
Under the base case scenario, Crisil also expects a higher import bill due to an 8-9 per cent year-on-year increase in crude oil prices.
Exports to West Asia have been affected by logistical challenges and supply-chain realignments due to the conflict, though the implications could be mixed, the report said.
India exported goods worth USD 57 billion to the Gulf Cooperation Council (GCC) countries (13 per cent of India's total exports) and USD 9 billion (2 per cent) to other West Asian countries, it added.
The GCC countries include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE, and other West Asian countries such as Iran, Iraq, Israel, Jordan, Lebanon, Syria, and Yemen.
For certain products, the region holds a significant share, accounting for over 70 per cent of Basmati rice exports, 30 per cent of boneless bovine meat, 25 per cent of ceramic products, 15 per cent of petroleum products, and 20 per cent of gems and jewellery.
The report said that exports to West Asia are being impacted by logistical challenges and supply-chain realignment.