Can India be a safe alternative to Gulf hubs?

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WHAT WE’RE TRACKING TODAY

Hyperscaler to shift workloads to India; Indian equities slide nearly 3%

Good afternoon, readers. The war has shown no signs of letting up over the weekend, with the UAE, Saudi Arabia, Bahrain, Qatar, and Kuwait intercepting multiple Iranian drones and missiles. The strikes impacted vital infrastructure across the region:

Bahrain’s state-owned oil company announced force majeure on its shipments this morning after strikes targeted the country’s sole oil refinery;
A desalination plant was also hit in Bahrain, causing damage, though no disruptions were reported;
Saudi Arabia reported its first fatalities, along with 12 injuries, after a projectile hit a residential area in Al Kharj, south of Riyadh;
Fuel tanks at Kuwait International Airport were also targeted in a drone attack.

The big story today: Multinational corporations operating in the Gulf are reviewing their risk planning to ensure continuity as business and financial hubs take a hit. The analysts we spoke to tell us that reshoring or flight of capital is unlikely in the short term, but companies are still looking at possible alternatives including India.

All of that and more below.

Watch this space

TECH — Disruptions to cloud services due to the Gulf conflict are prompting Amazon Web Services (AWS) and Microsoft Azure to consider shifting workloads from the region to alternative hosting locations including India and Singapore, Economic Times reports.

Infrastructure shift: These companies are seeking immediate capacity in Indian cloud hubs including Mumbai, Chennai, Hyderabad, and Kochi to host critical workloads, particularly for financial sector clients. Enterprises have begun activating disaster recovery protocols that include shifting workloads to safer regions.

Background: Iran’s strikes disrupted two data centers in the UAE and one in Bahrain, affecting services used by banking applications, airport operations in Dubai and Kuwait, and the UAE stock exchange, the daily added.

Why it matters: The Gulf conflict could boost the reliability of India’s cloud computing infrastructure. India currently has about 1.4 gigawatts (GW) of installed data center capacity, with global hyperscalers and Indian infrastructure groups including Reliance Industries, Adani Group, Tata Group, and Larsen & Toubro committing about USD 270 bn toward expanding the country’s data center ecosystem to around 10 GW over the next seven years.

MARKETS — Benchmark Indian equity indices plunged in early trade, with the Sensex and Nifty falling nearly 3% in early trade as escalating tensions triggered a broad risk-off sentiment.

Oil shock drives selloff: The rout follows a surge in Brent crude above USD 100 per barrel, rising fears of inflation and a widening current account deficit for India. Foreign investors continued to offload equities, amplifying volatility across banking, aviation, and infrastructure stocks.

Shares of Indian oil majors dipped up to 5.4% — Indian oil declined 4.6%, Hindustan Petroleum was down 4.9%, and Bharat Petroleum dipped 5.4%. The Nifty oil and gas index was trading 2.1% lower.

CURRENCY — The INR weakened past the INR 92 per USD mark to a record low of about 92.3 amid rising crude oil prices, foreign investor outflows, and the ongoing war in the Middle East, India Today reports. Last week, the Reserve Bank of India burned some USD 12 bn to support the currency. The downward push is likely to persist amid rising oil prices.

Oil watch

Oil prices surged 25% to a two-year high this morning as the regional war tightened energy supplies and lowered hopes of interest cuts, Reuters reports. Brent crude futures increased to USD 119.50 / bbl, while US West Texas Intermediate was up to USD 119.48 / bbl.

Why it matters:A USD 10 per bbl rise in average crude prices is expected to increase India's annual import bill by USD 13-14 bn, Prashant Vashisht, senior vice president of corporate ratings at ratings agency ICRA, told EnterpriseAM last week. Higher oil prices remain the most potent transmission channel for Asian economies, and every 10% rise in crude could worsen current-account balance by roughly 0.3% of GDP, with import-dependent economies such as India among the most exposed, ratings agency Nomura said in a note (pdf).

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The big story abroad

Leading today’s global news cycle is the appointment of a new supreme leader in Iran. Mojtaba Khamenei — Ayatollah Ali Khamenei’s son — is taking on the role after the killing of his father, according to Iranian state media. The decision was taken by a group of clerics known as the Assembly of Experts. US President Donald Trump had previously characterized the appointment of the former supreme leader’s son as “unacceptable.”

Circle your calendar

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

Gulf conflict pushes firms to evaluate relocation

Rethinking risk and business continuity: The war in the Gulf region is prompting firms operating across the India-MENA corridor to review business continuity and risk planning amid disruptions — however, drastic measures like reshoring are unlikely to happen in the short term. Nonetheless, India could present an alternative provided that regulations, tax structure, and infrastructure see improvement, analysts told EnterpriseAM.

The UAE’s position as a reliable financial and corporate hub in the Gulf is facing scrutiny inside multinational boardrooms after the Iran conflict disrupted transport networks, financial markets, and critical infrastructure across the region. “The image has undoubtedly taken a hit, but I don’t expect things to change for multinationals in the near term drastically,” UAE-based analyst Ehtesham Shahid told EnterpriseAM.

Crisis haven: Dubai’s rise as the region’s main financial center has been built on its reputation as a stable business hub despite repeated geopolitical crises across the Middle East, offering a global commercial gateway with low taxes, open capital flows, and regulations designed to attract multinational firms.

Perception shift: For an economy that is heavily dependent on expatriate residents and global capital mobility, such disruptions have raised questions over whether Dubai can remain insulated from wider regional instability. “The escalation has altered how investors and executives assess geopolitical risk in the region,” Shahid said.

Continuity, not relocation

Continuity mode: Inside multinational companies operating across the Gulf, the immediate focus remains business continuity rather than relocation. “It is all about minimizing the damage and maintaining operational structure and efficiency at the moment, and safeguarding staff and their families has to be another priority,” Shahid said.

Cautious watch: For Indian companies managing Middle East or Africa operations from the UAE, the response so far has largely been cautious. “For now, companies will likely be in a wait-and-watch mode and will be focused on making travel or mobility adjustments rather than actively looking to make operational changes,” said Jitin Makkar, senior vice president at ICRA.

However, prolonged instability could lead firms to introduce structural safeguards. “This event would likely push boardrooms to consider building redundancies — such as parallel headquarters in other regions — based on business continuity risk assessments,” Makkar said.

Investment decisions rarely shift overnight. “Like diplomacy, investment decisions are not zero-sum outcomes. They are the result of diverse, often competing factors,” according to Shahid.

Could India capture part of the ecosystem?

If companies begin diversifying operational hubs, India could attract some financial and administrative functions currently routed through Dubai.

India’s Gujarat International Finance Tec-City (Gift City) could benefit if disruptions in the Gulf persist, Economist Abhijit Mukhopadhyay told us. “There is indeed [a window]. If Dubai is unable to function properly, India could position itself to capture some fund-management, back-office, and hosting activity, especially in Gift City,” he said.

Reform imperative: However, he cautioned that India would need regulatory improvements and infrastructure upgrades to compete with established financial hubs. “This will depend on speeding up regulatory liberalization, tax certainty, and infrastructure so that investors see it as a genuine plug-and-play alternative,” Mukhopadhyay said.

“Back-office and other support functions can migrate to India if companies decide to build redundancies and if data or regulatory alignment is manageable,” Makkar said.

Dubai nonetheless retains advantages in connectivity, financial ecosystem depth, and proximity to Gulf capital markets. “While this escalation is a shock and would trigger a fundamental rethink, it could also present a chance to develop new risk management approaches,” Shahid told us. The conflict may not trigger an immediate corporate exodus from Dubai, but companies could reassess how they structure regional operations and risk management strategies.

India MENA economic corridor scrambles as flights, oil routes, and cargo shift

The sustained closure of Gulf transit routes is forcing a rapid, costly restructuring of the India-MENA trade and energy corridor. Egypt is stepping in to offer its Red Sea storage facilities as Indian refiners book crude deliveries from Saudi Arabia’s Red Sea port of Yanbu. Indian Airlines are absorbing up to USD 24 mn in immediate losses to reroute flights and clear passenger backlogs. On the water, exporters are pulling back an estimated USD 1.5 bn in stranded cargo as shipping lines impose war-risk surcharges that have spiked sharply.

Refiners pivot to Saudi’s Yanbu

Indian Oil Corporation (IOC) has secured crude cargoes loaded from Saudi Arabia’s Red Sea port of Yanbu as disruptions linked to the US-Israel conflict with Iran begin reshaping oil export logistics across the Middle East, Reuters reports. Saudi Arabia has increased shipments from its Red Sea terminals as tensions threaten traditional Gulf shipping corridors through the Strait of Hormuz.

Supply adjustments: Indian energy buyers have already diversified sourcing by increasing purchases of discounted Russian crude following a sanctions waiver by the US on Russian crude. India is also considering sourcing Russian liquefied natural gas if commercially viable supplies become available.

Egypt opens Red Sea oil storage to int’l players: Egypt has offered 10 crude and petroleum storage facilities for lease in the Red Sea, a senior government official tells EnterpriseAM. Egypt aims to attract oil deliveries from Saudi Arabia, Kuwait, Iraq, and Qatar, while doubling storage capacity at its Sumed- and Ras Badran-associated facilities, the source said.

Egypt is also offering its Sumed pipeline from Ain Sokhna to Sidi Kerir to facilitate the transfer of Saudi crude oil from Yanbu to the Mediterranean as a workaround to the Hormuz Strait closure. Egypt already has existing contracts with Saudi Arabia’s Aramco, as well as Kuwaiti and Qatari companies, for the pipeline’s operation, the source added.

Why this matters: Today is day T-minus 18 out of a 25-day countdown before GCC oil producers run out of storage space, according to analysts at JPMorgan. If the strait remains closed beyond this window, producers may have to stop output entirely because there will be nowhere left to store the oil.

Pulling back stranded cargo

Indian exporters have begun withdrawing consignments stranded at ports and airports through the back-to-town process after supply chains were disrupted by the ongoing US/Israel-Iran conflict, Hindu Businessline reports. The mechanism allows exporters to pull back cargo from customs areas when shipments are cancelled, flights are suspended, or export orders are withdrawn.

Why it matters: Industry estimates suggest up to USD 1.5 bn in cargo is now at risk of diversion, delayed delivery, or forced return to India, raising the prospect of major supply chain disruptions as the war stress tests the India-GCC trade corridor. An estimated 40-45k containers carrying Indian goods are currently stranded at sea or at international ports. The stranded shipments include about 0.4 mn tonnes of basmati rice, and exporters of perishable goods warn that prolonged delays could result in heavy financial losses.

Government steps in: The Central Board of Indirect Taxes and Customs has issued guidelines to facilitate cargo returns when shipments are stranded due to the Strait of Hormuz disruption to prevent congestion at Indian ports and terminals.

Ins. remains a bottleneck

India is seeking operational clarity on a proposed INR 1.66 tn (USD 20 bn) maritime reins. facility by the US International Development Finance Corporation (DFC) aimed at supporting shipping activity through Hormuz, Hindu Businessline reports. India’s Oil Ministry is already in discussions with US authorities but is awaiting details on vessel eligibility, insured amounts, and operational modalities before deciding whether to participate.

Ins. framework: The plan, approved by US President Donald Trump, would deploy maritime reins. — including war-risk coverage — in coordination with US Central Command. Coverage would initially extend to hull and machinery as well as cargo risks for vessels that meet the eligibility criteria.

Why it matters: Maritime insurers are rapidly repricing risk across Gulf shipping lanes amid threats to tankers transiting the Strait of Hormuz. War-risk premiums have surged, in some cases by over 1,000%.

Aviation

Indian airlines are mounting a massive recovery effort to clear a backlog of stranded passengers, as the conflict in the Middle East has disrupted Gulf airspace since 28 February.

Special evacuation flights: The Air India Group will operate 32 additional non-scheduled flights between India and the UAE today to bring stranded travellers home and clear passenger backlogs, according to a press release. IndiGo, India’s largest carrier, is also restoring services in phases, operating about 17 departures, or 34 flight sectors, to eight Gulf destinations while resuming routes to London, Manchester, and Amsterdam, according to a post on X.

Why it matters: Indian airlines are facing daily revenue losses and cost increases estimated at INR 1.5-2 bn (USD 18-24 mn). This comes on the back of a combination of cancelled high-yield international tickets and an up to 22% increase in fuel burn as flights to the Western hemisphere reroute via the Omani and Egyptian routes to avoid UAE and Iran airspaces.

Scale of disruption: Indian airlines cancelled 279 international flights on Sunday as the US-Israel-Iran conflict forced widespread airspace closures across the Gulf.

Fertilizers: Another commodity vulnerable to regional escalation

Yes — Hormuz matters for way more than oil and gas: Roughly one-third of global fertilizer shipments pass through the Strait of Hormuz, linking Gulf production hubs with agricultural markets worldwide. With shipping through the passageway disrupted, fertilizer markets are already repricing the risk — raising the prospect of higher crop input costs and, eventually, food prices.

Why it matters for India: India imports up to 25% of its fertilizer supply from the Gulf region. Nearly 46% of its urea comes from Oman alone, and over 60% of its nitrogen fertilizer imports come from Oman, Qatar, the UAE, and Saudi Arabia, according to News18. A large chunk of these shipments passes through the Strait of Hormuz, making India's agricultural supply chain highly sensitive to disruptions in this region

The fertilizer market is where the math starts for the food supply chain

Nitrogen fertilizers are the driver of modern agriculture. Methane is converted into ammonia and then upgraded into urea and other nitrogen products used to boost crop yields. Around half of global food production depends on synthetic nitrogen fertilizers, with 180 mn tons consumed globally each year.

The Gulf dominates the market, and nearly all of its output must move through Hormuz. Around 55-60 mn tons of urea are shipped by sea annually, with the Middle East accounting for some 40-50% of that volume. Iran exports roughly 5 mn tons, while Saudi Arabia contributes around 4-5 mn tons through producers like Sabic.

Energy shocks have amplified the pressure since natgas is the main input for nitrogen fertilizers. “Natural gas’ key role as a fertilizer input could hit agricultural producers, impacting food prices,” MENA Director at Horizon Engage Andrew G. Farrand tells EnterpriseAM. Qatar’s shutdown of the Ras Laffan LNG export facility sent reverberations through the industry. Qatar accounts for roughly 11% of global urea exports, according to Bloomberg Intelligence analyst Alexis Maxwell. The country exports some 5.5-6 mn tons of urea and ammonia annually from its Qafco complex.

Market reax: Prices for granular urea jumped USD 60 per ton after the effective closure of the strait. In the US Gulf, spot for urea jumped USD 60-80 from last week, with traders warning that increases could follow if disruptions persist.

Supply chains were already tight before the conflict escalated: Urea markets turned bullish earlier after drone damage hit a Russian nitrogen plant, tightening availability. The US, despite producing domestically, still relies on imports from the Middle East that transit Hormuz.

Fertilizers may not even be the first agricultural bottleneck to bite: For some high-tech growers, specialty inputs such as pollinators and biological pest-control supplies can become harder to replace before fertilizer shortages become tight. That means prolonged disruption can start weighing on yields through the wider agricultural input chain — not just through urea prices alone.

Adding fuel to the fire, the EU announced that it will keep carbon levies on imported fertilizers under its Carbon Border Adjustment Mechanism, rejecting calls to suspend the scheme despite concerns it could push up costs for farmers. “The decision is ill-timed, especially given the repercussions of the ongoing war, the rising energy prices, and the halt in urea production from Qatar, the UAE, and Saudi Arabia — the largest gas exporters. Therefore, prices will rise much higher than the ETS carbon price increase," Osama Henein, H2lligence founder and CEO, tells EnterpriseAM.

The impact

India is entering its peak summer procurement window for the upcoming sowing season. Without the fertilizer shipments as well as rising prices, the June sowing season for rice, pulses, and oilseeds — which account for over half of India’s grain production — is at risk. India’s farming sector is highly sensitive to input costs as the vast majority of its farmers operate on razor-thin margins.

Macro trouble: Rising prices will directly impact India’s fiscal deficit, as the government provided INR 1.7 tn (USD 18.3 bn) in fertilizer subsidies for its farming sector in the current fiscal year. With urea spot prices jumping USD 60-80 per ton, the government will be forced to choose between massive subsidy spending or letting food inflation spiral.

A short-lived Hormuz squeeze could be a boon for some GCC economies and a curse for others

The war between the US/Israel and Iran has fundamentally shifted the economic calculus for the GCC. While the headlines scream “oil shock,” the reality on the ground is a decoupling of price benefits from volume risks for some GCC countries, resulting in different scenarios across regional economies, according to a Goldman Sachs report seen by EnterpriseAM.

How is that possible? For countries capable of rerouting their oil exports, oil prices — which have surged beyond USD 100 / bbl — are going to offset the downside from lower export volumes, Goldman Sachs explains. Even blockaded countries are seeing better-than-expected budget balances because the price of the oil they can get out is so high. However, Goldman Sachs cautions that this scenario does not factor in expenditure forecasts, as they “may increase due to an adoption of anti-cyclical policy and/or increased spending on defense.”

The diverters: Saudi Arabia, the UAE, and Oman are the most insulated. Saudi Arabia is successfully diverting 3 mn bbl / d — about two-thirds of its Strait of Hormuz exports — via Red Sea pipelines, meaning a mere 1% drop in exports. The UAE is rerouting approximately 1 mn bbl / d, resulting in a negligible 2% drop in oil exports, while Oman’s loading facilities sit safely outside the Strait, Goldman Sachs notes.

Yes, but: This is based on an assumption of just a one-week-long disruption in shipping through the Strait of Hormuz, before a gradual return to full capacity.

IN CONTEXT- The Strait of Hormuz typically accounts for around 25% of global seaborne oil trade and some 20% of global LNG trade, according to a recent research note from Deutsche Bank seen by EnterpriseAM. However, oil flows through the chokepoint have now collapsed to just 10-15% of their normal volume, according to Goldman Sachs.

The blockaded: Kuwait, Bahrain, and Qatar have zero capacity to divert shipments. The report shows that Kuwait and Bahrain are now expected to see their economies contract this year, with oil exports falling by 5%.

Global exposure: Despite the EU and China being the world’s biggest energy importers, the impact of oil price volatility is potentially limited due to their declining dependence on fossil fuels, according to Deutsche Bank. Crucially, the EU’s energy import markets are diversified, resulting in a diminished reliance on Middle Eastern energy supplies.

The outlook: Future forecasts depend entirely on how long the Strait of Hormuz remains closed. Under the base case scenario of a “short-lived” disruption where volumes recover over 28 days, global growth would shrink by 0.1 percentage points, according to another Goldman Sachs report seen by EnterpriseAM. However, if the closure persists and oil stays above USD 100 / bbl, global growth would be dragged down by 0.4 percentage points, the report warns.

MARKETS THIS MORNING-

Asia-Pacific markets were down sharply in early trading this morning, with South Korea’s Kospi declining 7.8% and Japan’s Nikkei down 7.0%, after oil jumped above USD 100 / bbl for the first time in years. Over on Wall Street, it is shaping up to be a turbulent start to the week with futures in the red.

Sensex	77,226	-2.1% (YTD: -9.5%)
NIFTY 50	23,904	-2.2% (YTD: -6.4%)
ADX	9,741	-1.6% (YTD: -2.4%)
DFM	5,714	-3.4% (YTD: -2.1%)
Tadawul	10,897	-1% (YTD: -4.9%)
EGX30	46,032	-1.5% (YTD: +10%)
Boursa Kuwait	7,846	-0.02% (YTD: -5.3%)
QSE	10,416	-2.5% (YTD: -0.7%)
S&P 500	6,740	-1.3% (YTD: -1.5%)
FTSE 100	10,101	-1.7% (YTD: +3.5%)
Euro Stoxx 50	5,568	-2.6% (YTD: -1.2%)
Brent crude	USD 105	+14.08%
Natural gas (Nymex)	USD 3.35	+5.5%
Gold	USD 5,132	-0.7%
BTC	USD 67,990	+0.4%

The values in the table above are listed according to the market position as of 3:30pm IST / 2pm GST.

CALENDAR

MARCH

9-10 March (Monday-Tuesday): Pune International Business Summit, Pune.

12 March (Thursday): ET Entrepreneur Summit & Awards 2026, Bengaluru.

19-22 March (Thursday-Sunday): Bharat Urja Manthan - Global Energy Conclave, New Delhi.

20 March (Friday): Eid Ul-Fitr.

23-25 March (Monday-Wednesday): Indiasoft 2026: International IT Exhibition & Conference, New Delhi

23-25 March (Monday-Wednesday): Smart Cities Expo, Bharat Mandapam, New Delhi.

23-25 March (Monday-Wednesday): PLASTIWORLD India 2026, Jio World Convention Centre, Mumbai.

27-29 March (Friday-Sunday): Vizag International SME Business Expo, Visakhapatnam, Andhra Pradesh.

31 March (Tuesday): Mahavir Jayanti.

Signposted to happen sometime in March 2026

Election Commission of India is expected to announce polling dates for elections in the states of Tamil Nadu, Kerala, West Bengal, Assam, and the union territory, Puducherry.

APRIL

3 April (Friday): Good Friday.

6-8 April (Monday-Wednesday): Reserve Bank of India’s Monetary Policy Committee Meeting

7-10 April (Tuesday-Friday), India Rubber Expo 2026, ITPO, Pragati Maidan, Delhi.

16-17 April (Thursday-Friday): Entrepreneur Tech & Innovation Summit 2026, Bengaluru.

22-24 April (Wednesday-Friday): RenewX 2026, Chennai Trade Centre, Chennai.

23-25 April (Thursday-Saturday): Rail & Metro Technology Conclave 2025, Bharat Mandapam, New Delhi.

29 April-2 May (Wednesday-Saturday): Bharat Buildcon 2026, Yashobhoomi, Dwarka, Delhi.

MAY

29 April-2 May (Wednesday-Saturday): Bharat Buildcon 2026, Yashobhoomi, Dwarka, Delhi.

1 May (Friday): Buddha Purnima.

26 May (Tuesday): Eid Ul-Adha.

JUNE

24-25 June (Wednesday-Thursday): India Homeland Security Expo 2026, Bharat Mandapam, Pragati Maidan, New Delhi.

26 June (Friday): Muharram.

Signposted to happen sometime in 1H 2026:

Signing of India-Qatar Free Trade Agreement (Details yet to be announced).
India-EU Trade and Technology Council Ministerial Meeting 2026, Brussels, Belgium.
India to host the BRICS Summit.

JULY

1-3 July (Wednesday-Friday): Seafood Expo Bharat 2026, Chennai Trade Centre, Chennai.

3-4 July (Friday-Saturday): Rail & Transit Expo (RailTrans) 2026, Bharat Mandapam, New Delhi

8-10 July (Wednesday-Friday): India Energy Storage Week 2026, New Delhi.

14-17 July (Tuesday-Friday) Bharat Tex 2026, New Delhi.

AUGUST

15 August (Saturday): Independence Day.

26 August (Wednesday): Prophet Mohammad’s Birthday.

SEPTEMBER

1-3 September (Tuesday-Thursday): India Energy Week, Dwarka, New Delhi.

8-11 September (Tuesday-Friday): Global Fintech Fest 2026, Mumbai.

17-19 September (Thursday-Saturday) : Semicon India Conference 2026, Yashobhoomi, Delhi.

OCTOBER

2 October (Friday): Gandhi Jayanti (Mahatma Gandhi’s Birthday).

20 October (Tuesday): Dussehra.

NOVEMBER

24 November (Tuesday): Guru Nanak Jayanti.

DECEMBER

8-11 December (Tuesday-Thursday), Expand North Star 2026, Dubai.

25 December (Friday): Christmas Day.

Signposted to happen sometime in 2H 2026:

Monsoon Session of Parliament, New Delhi is expected to be held between July-August. Dates yet to be announced.
Reserve Bank of India’s Monetary Policy Committee meeting for the September cycle. Dates yet to be announced.
India Mobile Congress 2026, New Delhi will likely be held in October. Dates yet to be announced.

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