West Asia Crisis Puts South Asia Under Pressure

The war in West Asia is creating consequences far beyond the immediate conflict, with South Asian countries facing growing pressure from disrupted energy supplies, higher prices and vulnerable trade and supply chains. For countries with limited economic room to absorb external shocks, the longer the crisis continues, the greater the strain is likely to become.

Speaking to The Gist, Nilanthan Niruthan, a Sri Lankan defence analyst, geopolitical researcher and Executive Director of the Centre for Law and Security Studies in Colombo, said the conflict was already affecting the wider subcontinent. He also pointed to a potentially significant geopolitical consequence: Pakistan appears to be acquiring greater relevance as Saudi Arabia and Türkiye deepen their engagement with Islamabad.

The question is whether that translates into a lasting increase in Pakistan’s international standing. The conflict has created new diplomatic calculations across West Asia, while the emerging Saudi-Türkiye-Pakistan relationship gives Islamabad an opportunity to position itself more prominently at a time when regional security arrangements are being reassessed. For India, that development matters because Pakistan’s renewed relevance is emerging alongside a broader reordering of relationships in West Asia.

But the more immediate challenge for South Asia is economic. The region remains deeply dependent on energy supplies and trade routes connected to West Asia, leaving its economies exposed when conflict disrupts shipping, raises energy costs or affects the movement of goods. The consequences extend well beyond oil. Food prices, transport costs, industrial inputs and access to critical minerals can all be affected when global supply chains are disrupted for an extended period.

Sri Lanka is particularly exposed. Having already experienced a severe economic crisis, it has relatively limited financial room to absorb another prolonged external shock. Niruthan pointed to the rise in fuel and food prices and the wider pressures being felt by ordinary Sri Lankans. The comparison with India is revealing: while India also faces the consequences of higher energy and commodity prices, its much larger economy and greater financial capacity give it considerably more room to manage a prolonged disruption. Sri Lanka does not have the same cushion.

Bangladesh faces a different but related vulnerability. The country is already dealing with a power shortage even as it looks to secure additional electricity, including hydropower generated in Nepal and transmitted through India. Niruthan suggested that the current difficulties reflect more than one factor, with domestic instability and the wider international energy crisis both complicating Bangladesh’s position. A prolonged disruption would make that balancing act still harder.

Nepal faces the additional constraint of geography. As a landlocked country, it depends on neighbouring states and established transport corridors for access to energy and other essential supplies. Even where electricity generation is available, reliable access to wider markets and supply networks remains a challenge.

The West Asia crisis therefore illustrates a broader problem for smaller South Asian economies: their exposure is determined not only by what they produce, but also by how dependent they are on routes and markets beyond their control.

The disruption of critical-mineral supply chains adds another layer. India, for example, is seeking to expand industries such as electric vehicles that depend on reliable access to minerals and components sourced through complex global networks.

Any prolonged disruption therefore has implications not only for conventional energy security but also for industrial and technological ambitions. Countries such as Australia are already looking at ways to strengthen alternative sources and supply chains, but diversification takes time.

There is also renewed interest in alternative shipping routes, including the Northern Sea Route through the Arctic. But Niruthan was cautious about how much this can actually solve. A new shipping route may reduce dependence on particular maritime chokepoints, but it does not eliminate the fundamental problem that much of Asia’s energy still originates in and around the Gulf. Changing the route through which commodities move cannot by itself remove dependence on their source.

That leaves South Asian governments facing a difficult longer-term problem. They can diversify energy sources, build strategic reserves, develop alternative supply chains and seek new trading routes, but none of those measures can be implemented overnight.

Advertisement

The longer the West Asia conflict continues, the more difficult it becomes to treat its consequences as a temporary economic disruption.

Niruthan was therefore cautious about the assumption that the crisis will be resolved quickly. Asked whether the conflict could continue until the end of the year and how comfortably South Asian countries could navigate such a scenario, he suggested that the region may need to prepare for something considerably more prolonged.

His final assessment was that the current turmoil could be the beginning of a long and troubling period rather than simply another short-lived regional crisis.

That may ultimately be the most important implication for South Asia. The region cannot control how the conflict in West Asia develops, but it is deeply exposed to its consequences. Energy dependence, fragile supply chains, limited financial buffers and the changing balance of power around the Gulf mean that what happens in West Asia can quickly become an economic and geopolitical problem in South Asia.

For India, the challenge is to manage those external shocks while protecting its growth and energy requirements. For smaller economies such as Sri Lanka, Bangladesh and Nepal, the margin for error is considerably narrower.

A prolonged West Asia crisis would therefore not affect every South Asian country equally. It would test how much economic and strategic resilience each one has.

Watch the full interview for frank and fascinating insights into not just how the West Asia crisis is changing the geopolitical dynamics of the Indian subcontinent, but also why.