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Middle East crisis: Rajnath Singh to head inter-ministerial group to monitor conflict-linked issues

March 27, 2026 5 min read Internal Security Economics International Relations GS2 (India's Foreign Policy International Relations) GS3 (Energy Security Internal Security)
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What Happened

  • The Union government has constituted an Inter-Ministerial Group (IMG) headed by Defence Minister Rajnath Singh to monitor issues arising from the escalating Middle East conflict and its impact on India's economy, energy security, and supply chains.
  • Members include Home Minister Amit Shah, Finance Minister Nirmala Sitharaman, and Petroleum Minister Hardeep Singh Puri, along with other concerned ministers — representing a whole-of-government response.
  • The primary concerns driving the IMG's formation are: disruption to crude oil and LPG imports through the Strait of Hormuz, supply chain disruptions affecting Indian industry, inflationary pressures from rising fuel prices, and the impact on the Indian rupee and trade flows.
  • The conflict in West Asia, involving Iran, Israel, and US military engagement, has created uncertainty over the Strait of Hormuz — a critical chokepoint through which roughly 20-25 million barrels of oil and gas per day flow globally.
  • India has already cut excise duties on petrol and diesel (petrol to ₹3/litre; diesel to zero) and imposed a windfall tax on diesel exports (₹21.5/litre) as immediate fiscal cushions.
  • The group will provide regular situation assessments and recommend policy interventions to the Cabinet as the crisis evolves.

Static Topic Bridges

India's Energy Security and the Strait of Hormuz Chokepoint

The Strait of Hormuz, a narrow waterway between Iran and Oman at the mouth of the Persian Gulf, is the world's most critical oil chokepoint. Approximately 20–25 million barrels of crude oil and liquefied natural gas pass through it daily — roughly 20% of global petroleum liquids supply. Any disruption to traffic through the Strait has immediate and cascading implications for energy-importing nations, with India being particularly exposed.

  • India is the world's third-largest oil importer and second-largest destination for Hormuz-transit crude (14.7% of flows, after China).
  • India consumes roughly 5.5 million barrels of crude oil per day; about 60% of imports originate from the Middle East.
  • Pre-crisis: approximately 45% of India's crude oil imports transited the Strait of Hormuz; after rapid diversification, India claims to have secured 70% of crude from outside Strait of Hormuz routes.
  • India imports ~60% of its LPG consumption; ~90% of those LPG imports transit the Strait of Hormuz — the most vulnerable segment.
  • Alternatives to Hormuz: Cape of Good Hope routing (adds 10-15 days and significant freight costs), US/Canadian crude via Atlantic routes, Russian crude via northern routes.
  • India's Strategic Petroleum Reserves (SPR): Currently ~5.3 million metric tonnes capacity at Visakhapatnam, Mangaluru, and Padur — covering approximately 9-10 days of consumption.

Connection to this news: The IMG's primary mandate — monitoring energy security — reflects that even with 70% crude imports outside the Strait, India's LPG and residual crude exposure, plus the broader impact on global oil prices, creates severe macro-economic risk requiring coordinated government response.

Inter-Ministerial Groups (IMGs): India's Crisis Coordination Mechanism

Inter-Ministerial Groups (IMGs) are ad hoc coordination bodies constituted at Cabinet level to handle cross-cutting challenges that span multiple ministry jurisdictions. They report to the Cabinet or Cabinet Committee on Economic Affairs (CCEA) and typically have a fixed scope and timeline.

  • IMGs are distinct from permanent Cabinet Committees (e.g., Cabinet Committee on Security/CCS, Cabinet Committee on Economic Affairs/CCEA) — they are issue-specific.
  • They have been historically convened for economic shocks (global financial crisis 2008), natural disasters (flood coordination), and security crises.
  • Rajnath Singh's leadership of a defence-polity-economy IMG is significant — it signals that the government views the Middle East conflict not just as a foreign policy issue but as a national security and economic stability challenge.
  • A four-minister IMG combining defence, home, finance, and petroleum portfolios creates a command structure capable of making rapid operational decisions across military readiness, border security, fiscal policy, and energy procurement.
  • Decisions from the IMG will feed into the Cabinet Committee on Security (CCS) for matters with strategic security implications.

Connection to this news: The formation of this IMG is an institutional response to a multi-domain threat: military risks in the Middle East that cascade into Indian economic vulnerabilities (inflation, currency, supply chains) and potentially internal security risks (rising commodity prices, social unrest).

India's West Asia Policy: Balancing Act under Conflict Conditions

West Asia (Middle East) is India's most important extended neighbourhood in economic terms — it hosts over 9 million Indian diaspora, provides ~60% of India's crude oil, and is the terminus of critical trade corridors. India's long-standing policy of strategic non-alignment in West Asian conflicts — maintaining relations with Israel, Arab Gulf states, Iran, and Palestinian groups simultaneously — is now under severe stress.

  • India-UAE bilateral trade: ~$85 billion annually; UAE is India's third-largest trade partner and the largest source of Indian remittances.
  • India-Saudi Arabia: Saudi Arabia is the third-largest supplier of crude oil to India; India-Saudi Arabia Vision 2030 partnership active.
  • India-Iran: Chabahar Port development (India invested $85 million in Phase 1); the port is a strategic gateway to Afghanistan and Central Asia via the International North-South Transport Corridor (INSTC), and an Iran-US conflict directly threatens this investment.
  • India-Israel: Defence partnerships (Barak-8 missile, Harop drones, Heron UAVs); bilateral trade ~$10 billion; people-to-people ties through Indian Jewish diaspora.
  • India-Palestine: India supports a two-state solution; abstained or voted against Israel at UNGA on several Gaza-related resolutions in 2023-24.
  • Remittances from Gulf: Indian diaspora in Gulf sends ~$40 billion annually (largest source of India's total remittance receipts of ~$125 billion in 2023-24).

Connection to this news: The IMG's scope — energy, supply chains, global order disruptions — encompasses all dimensions of India's West Asian exposure. Rajnath Singh's leadership signals that India treats the conflict as a matter of national security, not merely foreign policy.

Key Facts & Data

  • IMG Chairman: Rajnath Singh (Defence); members: Amit Shah (Home), Nirmala Sitharaman (Finance), Hardeep Singh Puri (Petroleum).
  • India crude import dependence: ~85% imported; ~60% from Middle East.
  • India LPG import dependence: ~60% of consumption imported; ~90% of those via Strait of Hormuz.
  • Strait of Hormuz daily flow: ~20-25 million barrels of oil and gas (20% of global petroleum liquids).
  • India's SPR capacity: ~5.3 million metric tonnes (~9-10 days of consumption).
  • Excise duty cut: Petrol to ₹3/litre; diesel to zero; windfall tax on diesel export: ₹21.5/litre.
  • Indian diaspora in Gulf: ~9 million; annual remittances from Gulf: ~$40 billion.