South Asia Prepares for Multiple Disruptions from Gulf War 3.0

With portends of escalation in Gulf War 3.0, medium to long term concerns have emerged in the developing World. US President Donald Trump warned that Washington could target Iranian power infrastructure if Tehran does not lift its blockade of the Strait of Hormuz – a critical global oil transit route – within 48 hours.

Iranians, on their side, are also belligerent and have attacked a nuclear facility in central Israel in response to Tel Aviv attack on the Natanz nuclear facility in Iran. Houthi rebels have also threatened to join in the war with Iran with a threat to shipping in the Red Sea and the Suez Canal.

Thus almost three weeks after the outbreak of Gulf War 3.0 on February 28, the grim reality of a long term economic disruptions is evident to multiple economies in South Asia with dependence on the Middle East for oil and gas, large migrant presence, remittances, investments, shippers on commercial liners amongst other factors. The overall impact on multiple supply chains is expected to on the last man in the food chain. While several economies are already on debt recovery and International Monetary Fund [IMF] funding programmes.

Here is how countries in the region are preparing for a medium to long term crisis replicating recent disruptions such as COVID 19 as of March 22.

India

Indian Prime Minister Shri Narendra Modi chaired a meeting of the Cabinet Committee on Security [CCS] on March 22 noted a Press Information Bureau release to review the situation and ongoing and proposed mitigating measures in the context of ongoing West Asia Conflict.

The Cabinet Secretary gave a detailed presentation on the global situation and mitigating measures taken so far and being planned by all concerned Ministries/Departments of Government of India, expected impact and measures taken to address it across sectors like agriculture, fertilisers, food security, petroleum, power, MSMEs, exporters, shipping, trade, finance, supply chains and all affected sectors were discussed. The overall macro-economic scenario in the country and further measures to be taken were also discussed.

The ongoing conflict in West Asia will have significant short, medium and long term impact on the global economy and its effect on India were assessed and counter-measures, both immediate and long-term, were discussed.

Detailed assessment of availability for critical needs of the common man, including food, energy and fuel security was made.

Short term, Medium term and Long term measures to ensure continued availability of essential needs were discussed in detail.

The impact on farmers and their requirement for fertiliser for the Kharif season was assessed.

It was also determined that adequate supply of coal stocks at all power plants will ensure no shortage of electricity in India. Several measures were discussed to diversify sources of imports required by chemicals, pharmaceuticals, petrochemicals and other industrial sectors.

PM directed that a group of ministers and secretaries be created to work dedicatedly in a whole of government approach. PM also instructed for sectoral groups to work in consultation with all stakeholders.

[Source: Press Information Bureau India]

Bangladesh. Bangladesh is seeking about $2 billion in loans from multilateral lenders by June in a bid to finance imports of liquefied natural gas and other fuels during the summer, Bloomberg reported. Bangladesh has expressed deep concern for the safety and welfare of seafarers, including its nationals aboard vessels operating in war-affected areas of the Middle East. Dr Nazrul Islam, Bangladesh’s deputy high commissioner to the United Kingdom, voiced the concern while delivering a statement at the 36th Extraordinary Session of the International Maritime Organization Council on the Middle East crisis in London.

[Source – Daily Star Bangladesh]

Bhutan. The 54.2 percent increase in diesel prices could raise monthly inflation by an estimated 19.5 percent within a month. According to the National Statistics Bureau, the headline inflation had already climbed to 5.76 percent in January this year. Food inflation increased to 7.33 percent and non-food inflation increased to 5.38 percent. Global shock, local impact At the State Trading Corporation of Bhutan Limited Fuel Station in Ramtokto, Thimphu, the price of petrol increased from Nu 63.17 per litre to Nu 85.18, a rise of Nu 22.01, while diesel rose from Nu 70.06 per litre to Nu 108.05, an increase of Nu 37.99. Fuel accounts for 9.88 percent of the Consumer Price Index basket. The service sector is the largest consumer of fuel at 37.29 percent, followed by the household sector at 23.47 percent, the industrial sector at 15.94 percent, and the agriculture, livestock, and forestry sector at 10.05 percent.

[Source:Kuenselonline ]

Maldives. Finance Minister Moosa Zameer has articulated a dual-pronged response strategy: implementing necessary cost-cutting measures, such as adjusting project timelines, while actively pursuing external borrowing to manage foreign currency liquidity. Despite these pressures, the administration remains firmly committed to maintaining essential public services, including healthcare, food, and fuel security, alongside supporting Maldivian students overseas. With significant debt repayments scheduled for the coming month, the government is prioritizing economic stability through multilateral engagement.       Zameer, speaking at a press conference held by the ministerial committee formed to assess the impact of the war involving Iran, Israel and the United States, said he has briefed President Dr Mohamed Muizzu and sought guidance on the government’s response.

[Source: Sun online].

Myanmar. Domestic fuel prices in Myanmar experienced a massive surge on 20 March, 2026, with the Military Commission’s Fuel Import, Storage and Distribution Supervision Committee announcing hikes of approximately 1,000 kyats across all major fuel categories. The price of 92-octane gasoline rose by nearly 800 kyats per litre, while 95-octane increased by over 900 kyats. The most dramatic shift was seen in diesel prices, which surged by more than 1,200 kyats per liter in a single day. Housewives say the latest surge in domestic fuel prices, coupled with the Military Commission’s decision to raise electricity tariffs in industrial zones and special economic zones by 900 kyats per unit, is driving up the cost of food and basic commodities, including rice and cooking oil. Citing the need to conserve fuel amid the conflict in the Middle East, the Military Commission has imposed an odd-even vehicle restriction system allowing cars with even-numbered plates to operate on even days and those with odd numbers on odd days while exempting electric vehicles, and limiting fuel purchases to once daily through a QR code system.

[Source – Mizzima News]

Nepal. Nepal’s economy could face a myriad of problems—from rising inflation and slower economic growth to declining household income—if geopolitical tensions in West Asia prolong, experts warn. at an event titled “Problem in the Middle East and Impact on the Nepali Economy”, organised by the Society of Economic Journalists-Nepal in Kathmandu on Friday. A prolonged conflict could hit remittance earnings and tourism revenue while also affecting the agriculture sector due to rising chemical fertiliser costs and increasing inflation triggered by higher fuel prices. The weakening demand for workers in conflict-affected areas could also affect Nepal’s labour market.  “We have estimated that four to five areas will be severely impacted. The first is inflation,” said Gunakar Bhatta, former executive director of Nepal Rastra Bank, the country’s central bank.

[Source – Kathmandu Post]

Pakistan. Amidst austerity measures that had been announced by Prime Minister Shahbaz Sharif earlier. Pakistan Cricket Board (PCB) Chairman Mohsin Naqvi said that the upcoming edition of the Pakistan Super League will go ahead as scheduled despite ongoing concerns but without spectators on March 26. The PCB chairman said that the matches will be played behind closed doors until the regional tension persists. The decision followed the government's wide-ranging austerity and savings plans to deal with the prevailing global fuel crisis triggered by the ongoing US-Israel-Iran conflict. "We don't know how long the current situation will persist, but hosting the PSL is essential. It is an international brand, and foreign players are involved. Everyone is eager for the PSL to go ahead.” Naqvi said that the tournament will be limited to two venues, Karachi and Lahore, in order tominimise team travel and denied there were any security issues.

[Source: News Pakistan]

Sri Lanka.      Opposition Leader Sajith Premadasa accused President Anura Kumara Dissanayake in Parliament, accusing him of failing to uphold international law during wartime and President’s claim of neutrality ignored breaches of the UN Charter— including Articles 2.4 and 2.7—and other global conventions. He ridiculed the government’s earlier dismissal of the QR code fuel system, noting that officials are now adapting to it. Turning to broader economic concerns, he called for immediate negotiations with the IMF to secure a new agreement, warning that the current primary balance of 2.3 is unsustainable. He stressed the urgent need for a poverty-reduction program, highlighting that one-third of Sri Lankans live in poverty. This comes as the Lanka IOC PLC (LIOC) announced an increase in fuel prices across several categories, effective from March 22 by Rs. 79 to Rs. 382 per litre for normal diesel. In the petrol category, Octane 92 Petrol has been increased by Rs. 81 to Rs. 398 per litre, while Octane 95 Petrol has gone up by Rs. 32 to Rs. 487 per litre. The price of kerosene has also been increased by Rs. 60, bringing the new rate to Rs. 255 per litre. This is expected to impact the common man considerably with increase in prices of all types of fuel.

[Source : The Island and Daily Mirror Lanka]