Gaza's expanding footprint

The conflict is getting unpredictable

The expanding theatre of conflict in West Asia following the outbreak of the Hamas-Israel hostilities in Gaza on October 7 last year has substantially increased the level of threat to global stability and growth. Iran and Pakistan’s missile strikes on each other’s territories have raised the temperature. With a decisive expansion of Iran’s involvement in the conflict, the footprint of the Gaza war has expanded to Iraq, Syria, Lebanon, and even Pakistan. Earlier this month, Iran-backed anti-Israel Houthi rebels in Yemen destabilised world trade with their unanticipated attacks on shipping on the Europe-Southeast Asia route. This route accounts for 12 per cent of global trade and has caused major shipping companies to divert their vessels around the longer route, causing shipping costs to more than double in less than a month. Over the weekend, Israeli missile strikes in Damascus killed three Iranian Revolutionary Guards; another on Iran-backed Hezbollah bases in Lebanon killed one. On Saturday, Iran-backed groups in Iraq launched missiles and rockets at a US air base, injuring several US soldiers, some severely. In short, the risks in the region seem only to be increasing.
 

The core of the problem lies in the intransigence of the principal actors in the conflict. There has been worldwide condemnation, including in the United Nations, of civilians in Gaza being made a collateral damage in Israel’s retaliation against the Hamas’ October attacks. Israeli Prime Minister Binyamin Netanyahu’s right-wing coalition is politically weak and leaves him vulnerable to its more extreme elements. His survival, therefore, depends on how the situation in Gaza is handled. His advantage lies in the fact that it is politically inconvenient for the US to withdraw defence and logistical support to an ally it was instrumental in creating under pressure from a powerful and wealthy domestic lobby. Having faced pro-democracy protests over the past year, Iran’s ruling regime has little incentive to dial down its implacable animosity with Israel and the US, which had withdrawn from the nuclear deal with Tehran under President Donald Trump.
 

In this fast-moving fluid situation, India has held the line on its traditional diplomatic positions. The official response to Iran’s cross-border missile strike on Pakistani Balochi bases of Jaish al-Adl, a designated terror group, was implicit support of Tehran’s actions as an act of self-defence against terrorists, underlining New Delhi’s position of zero-tolerance for terrorism. But the prolonged threat to global shipping is yet to be resolved. Despite attacks on Houthi bases by the navies of the UK and US, global shipping on this route is unlikely to stabilise anytime soon. This raises challenges for India. Russian crude oil, which has a substantial share in India’s imports, is mostly routed through the Red Sea. So far, there has been no disruption in supplies, but this could change. Supplies from Iraq, India’s second-largest supplier, could be affected if hostilities deepen. At Davos, Petroleum and Natural Gas Minister Hardeep Puri said India would diversify oil supply sources and accelerate the transition to renewable power. The other major threat is to India’s exports to Europe, its second-largest destination. Around 80 per cent of goods India exports to Europe are routed through the Red Sea. The alternative Africa route will considerably increase costs and threaten India’s competitive position. Sustained geopolitical risks in the region could begin to affect India’s economic prospects.