<p data-path-to-node="1">Global consultancy firm EY has warned that prolonged geopolitical friction in West Asia risks derailing India's long-term economic path. The advisory outlines a pressing need for policymakers to move past traditional transport frameworks, calling for the fast-tracked execution of the India-Middle East-Europe Economic Corridor (IMEC) and expanded Indo-Pacific trade routes via the Malacca Strait to insulate the domestic economy from international supply chain shocks.</p><p data-path-to-node="2">The analysis follows severe disruptions to standard commercial trade routes. Since Iran closed off the Strait of Hormuz on February 28, 2026 following targeted, coordinated military strikes by the US and Israel regional maritime traffic has collapsed by over 90 percent. Consequently, global crude prices climbed to an average of $103.9 per barrel in April, marking their highest levels since mid-2022 and threatening to widen India's current account deficit while driving up food and fuel inflation.</p><h4 data-path-to-node="3"><b data-path-to-node="3" data-index-in-node="0">Reducing Strategic Dependence on Key Maritime Chokepoints:</b></h4><ul data-path-to-node="4"><li><p data-path-to-node="4,0,0"><b data-path-to-node="4,0,0" data-index-in-node="0">Bypassing the Strait of Hormuz:</b> India currently relies on foreign sources for roughly 88 percent of its domestic crude oil and half of its natural gas needs, the vast majority of which must navigate the vulnerable Strait of Hormuz. EY notes that while recent moves to diversify petroleum sources have cushioned early impacts, long-term trade stability requires direct, alternative intermodal paths.</p></li><li><p data-path-to-node="4,1,0"><b data-path-to-node="4,1,0" data-index-in-node="0">Accelerating the IMEC and Eastern Corridors:</b> The firm urges immediate, state-led mobilization to build out IMEC's transit infrastructure. Once fully operational, the multi-modal corridor is projected to slash freight transit times to Europe by 40 percent and lower overall logistics overheads by up to 30 percent.</p></li><li><p data-path-to-node="4,2,0"><b data-path-to-node="4,2,0" data-index-in-node="0">Leveraging Indo-Pacific Trade Corridors:</b> In tandem with western-facing routes, India must aggressively scale its maritime presence along eastern routes through the Malacca Strait, securing deep-water commercial agreements to stabilize raw material imports and expand manufacturing export channels.</p></li></ul><h4 data-path-to-node="5"><b data-path-to-node="5" data-index-in-node="0">Critical Policy Reorientation: Building Essential Resource Buffers</b></h4><p data-path-to-node="6">To safeguard ordinary consumers and industrial supply lines from unexpected economic or biological crises, the report stresses that economic security must now be prioritized alongside standard GDP expansion. EY recommends the immediate stockpiling of five essential categories of strategic reserves:</p><ol start="1" data-path-to-node="7"><li><p data-path-to-node="7,0,0"><b data-path-to-node="7,0,0" data-index-in-node="0">Crude Oil &amp; Energy Products:</b> The report points out that India's current strategic crude inventories are alarmingly thin, holding only enough fuel to cover four to five days of normal national consumption—far below the comprehensive emergency reserves maintained by neighboring industrial powers like China and Japan.</p></li><li><p data-path-to-node="7,1,0"><b data-path-to-node="7,1,0" data-index-in-node="0">Liquefied Petroleum Gas (LPG):</b> Expanded stockpiles are recommended to insulate domestic households from sudden spikes in retail cooking gas costs.</p></li><li><p data-path-to-node="7,2,0"><b data-path-to-node="7,2,0" data-index-in-node="0">Agricultural Fertilizers:</b> Building a deep domestic reserve of primary fertilizers is deemed vital to suppress sudden spikes in farming overheads, safeguarding national food security and controlling broader food inflation.</p></li><li><p data-path-to-node="7,3,0"><b data-path-to-node="7,3,0" data-index-in-node="0">Critical Mineral Reserves:</b> The state should prioritize secure, long-term storage facilities for both processed and unprocessed rare earth elements, which are vital for the country's domestic electronics and clean-energy technology sectors.</p></li><li><p data-path-to-node="7,4,0"><b data-path-to-node="7,4,0" data-index-in-node="0">Basic Medicines &amp; Advanced Medical Equipment:</b> Establishing a unified medical backup system will protect the pharmaceutical manufacturing sector against sudden raw ingredient (API) shortages and supply embargoes.</p></li></ol><h4 data-path-to-node="8"><b data-path-to-node="8" data-index-in-node="0">Driving Long-Term Fuel Substitution:</b></h4><p data-path-to-node="9">The consultancy concludes that the definitive solution to foreign trade vulnerabilities lies in structurally reducing fossil fuel demand. The report calls for an immediate shift toward nuclear power creation, accelerated exploration of domestic oil finds, and policy adjustments to speed up consumer adoption of electric vehicles (EVs) alongside green hydrogen networks.</p>