The ongoing war involving Iran, the US and Israel sent shockwaves through India’s financial markets and trade corridors on Monday, weakening the rupee past the 91-mark against the dollar, triggering the steepest fall in benchmark equities in weeks, hardening crude and gold prices, and disrupting cargo flows across air and sea routes.
As risk-off sentiment gripped investors and shipping lines imposed steep war-related surcharges, the government convened urgent consultations to assess the fallout on exports, imports and supply chains.
Rupee at one-month low
The rupee touched a one-month low, opening at 91.25 per dollar, 28 paise weaker than the previous close of 90.97, and testing an intraday range of 91.2150 to 91.4900 before closing at 91.47, down 50 paise. The Reserve Bank of India is believed to have intervened to prevent a sharper slide.
Equity benchmarks mirrored the anxiety. The BSE Sensex closed at 80,238.85, down 1,048.34 points after opening sharply lower at 78,543.73. The NSE Nifty 50 ended at 24,865.70, declining 312.95 points after hitting an intraday low near 24,600.
Safe-haven demand drove precious metals higher. Gold topped $5,375 an ounce globally, while silver nearly touched $95 before easing. In Mumbai’s spot market, gold jumped ₹8,374 to ₹1,67,471 per 10 grams from ₹1,59,097 over the weekend.
Trade and logistics channels felt immediate strain. Shipping lines imposed ‘Emergency Conflict and War Risk’ surcharges ranging from $1,500 to $4,000 per container for cargo to and from Arabian Peninsula ports, with some carriers suspending bookings. Air cargo was also disrupted: about 450 tonnes meant for West Asia/Gulf carriers were stranded at Chennai airport alone, while 13 incoming Middle East commercial flights were cancelled there. Bengaluru airport reported 72 cancellations.
Exporters flagged mounting risks
Basmati shipments to West Asia have been disrupted, with 60,000–70,000 tonnes on the high seas, some near Bandar Abbas. During April-January 2025-26, basmati exports had risen 11 per cent year-on-year to 5.38 million tonnes. Cashew exporters reported shipments worth hundreds of crores stranded, while pistachio prices rose by ₹100 per kg amid disrupted Iranian supplies.
India Ratings & Research warned that a prolonged closure of the Strait of Hormuz could raise freight costs by 3–5 per cent, increase insurance premiums by 0.1–0.5 per cent, lengthen voyage times and escalate working capital pressures. Chief Economist Devendra Pant cautioned that remittance inflows could also be affected if the conflict persists.
While brent crude, the global benchmark, climbed close to $80 per barrel, Indian refiners may tap Russian barrels floating in the Indian Ocean and Arabian Sea.
Meanwhile, the Department of Commerce held an urgent stakeholder consultation on Monday to assess the disruptions. Chaired by Special Secretary Suchindra Misra and DGFT Lav Agarwal, stakeholders discussed mechanisms for facilitation of time-sensitive export segments such as perishables, pharmaceuticals, and high-value manufactured exports.
Published on March 2, 2026
