New Delhi: Escalating conflict and military actions in West Asia pose a severe threat, potentially driving 2.5 million Indians into poverty and reversing some of the nation’s human development strides, according to United Nations estimates.
In its report Military Escalation In The Middle East: Human Development Impacts Across Asia And The Pacific, the United Nations Development Programme (UNDP) states that the conflict is “widening human development pressures across Asia and the Pacific. Through higher fuel, freight, and input costs, the shock is diminishing household purchasing power, raising food insecurity, straining public budgets, and weakening livelihoods.”
Tuesday’s preliminary analysis forecasts 8.8 million people worldwide at risk of poverty due to the West Asia flare-up, with Asia-Pacific economies facing losses of up to $299 billion, PTI reported.
Poverty Surge and HDI Setbacks In South Asia
India could see its poverty-affected population balloon from about 400,000 to 2.5 million, the report indicates. Globally, conflict-driven poverty risks climb from 1.9 million to nearly 8.8 million across scenarios, with South Asia hit hardest—from 1.7 million to over 8 million — due to its population scale and sensitivity to income and price shocks, according to the UNDP report.
China anticipates a smaller proportional uptick, from 115,000 to over 620,000 people at risk.
In the starkest outlook (28-day conflict with eight-month adjustments), India’s poverty rate edges to 24.2% from 23.9%, ensnaring 2,464,698 more individuals. Post-crisis, 354,033,698 Indians would live in poverty, versus 351,569,000 beforehand.
UNDP’s HDI modeling reveals Iran losing the equivalent of one to one-and-a-half years of progress. “India is projected to experience a loss of approximately 0.03–0.12 years of HDI progress, followed by Nepal at around 0.02–0.09 years and Viet Nam at 0.02–0.07 years, while for China, the estimated effects on HDI remain limited in magnitude, ranging roughly 0.01–0.05 years,” the report details.
Trade, Energy And Food Security Vulnerabilities
India’s import dependence amplifies risks: over 90% of oil comes from abroad, including more than 40% crude and 90% LPG from West Asia; the region provides over 45% of fertiliser imports, and 85% of urea production relies on imported regasified LNG (UNDP analysis).
Nations like India, Thailand, the Philippines, and Vietnam are ramping up coal power as LNG costs soar.
Supply chains in 25 of 36 Asia-Pacific countries face hits from freight surcharges, war-risk premiums, rerouting, and delays. India’s West Asia trade includes 14% of exports and 20.9% of imports, with $48 billion in non-oil exports such as basmati rice, tea, gems, jewellery, and apparel. Bangladesh reports disruptions from Gulf flight cancellations and stranded India-Bangladesh shipments.
Food insecurity intensifies with remittance declines: “For several countries, including India, Pakistan, Bangladesh, Nepal, and the Philippines, food security pressures could also be compounded by remittance losses, as reduced Gulf economic activity weakens household incomes and purchasing power.”
In India, this aligns perilously with Kharif preparations from June: “In India, the timing is especially sensitive: any prolonged disruption would coincide with the preparations for the Kharif (the monsoon cropping season), which begins in June. Urea stocks stood at 6.114 million tons, providing a near-term buffer but not fully insulating the sector if disruptions persist into the planting season,” the report warns.
Remittances, Jobs And Resilience Pathways
Remittances and migrant labour face major strains: “For several countries, the scale of direct exposure to Gulf labour markets and remittance flows is both substantial and consequential.” India leads with 9.37 million GCC residents (Ministry of External Affairs, October 2024), channeling 38-40% of national remittances.
Broader economic ripples threaten Asia-Pacific jobs via trade, mobility, and supply issues. In India, informal sectors (90% of employment) are prime targets, especially MSMEs in hospitality, food processing, construction materials, steel manufacturing, gems, and diamonds.
“In India, employment risks are likely to be especially pronounced in MSME-intensive sectors that rely on imported energy and inputs or are exposed to Gulf-linked trade. This is particularly significant in a labour market where about 90 per cent of employment is informal. Small firms in hospitality, food processing, construction materials, steel-based manufacturing, and gems and diamonds may face higher input costs, supply shortages, and delayed or cancelled orders, with knock-on effects on jobs, hours worked and business continuity. These pressures could translate into reduced working hours, job losses and business interruptions, especially for informal and migrant workers and MSMEs operating with limited financial buffers and constrained access to credit,” the report said.
Medical devices face 50% raw material cost hikes near the Strait of Hormuz, with medicine wholesale prices up 10-15%.
UN Assistant Secretary-General and UNDP Regional Director for Asia-Pacific Kanni Wignaraja , however, highlighted potential silver linings, saying: “At the same time, we see important opportunities for countries to accelerate longterm resilience through adaptive social protection, stronger local and regional value chains, and diversified energy and food systems.”
