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Govt sets up inter-ministerial group to monitor West Asia developments: Goyal

March 03, 2026 5 min read International Relations Economics GS2 (Government Mechanisms International Relations) GS3 (Indian Economy Trade Supply Chains)
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What Happened

  • The Government of India set up an Inter-Ministerial Group (IMG) for supply chain resilience to monitor West Asia developments daily and assess vulnerabilities in shipping, logistics, exports, and critical imports
  • The IMG comprises representatives from the Department of Financial Services, Ministry of External Affairs, Ministry of Shipping Ports and Waterways, Ministry of Petroleum and Natural Gas, and the Central Board of Indirect Taxes and Customs (CBIC)
  • The group was activated after exporters warned of a looming crisis: cargo bound for West Asia was piling up at Indian ports, and West Asian importers were unable to source goods due to shipping disruptions
  • Commerce Minister Piyush Goyal confirmed the IMG was meeting daily; the government simultaneously engaged Customs and Port authorities for procedural flexibility and smooth clearance
  • The group's mandate includes coordinating with financial and insurance institutions to safeguard exporter interests

Static Topic Bridges

Inter-Ministerial Coordination Mechanisms in India

India uses inter-ministerial groups (IMGs), empowered committees, and Group of Ministers (GoMs) as formal coordination instruments when a crisis cuts across multiple ministries. These are executive mechanisms created under the Government of India (Transaction of Business) Rules, 1961, and do not require parliamentary approval. They are typically time-bound, issue-specific bodies with authority to coordinate across departmental silos.

  • GoMs (Group of Ministers) have political-level representation and are used for policy decisions; IMGs are secretary or joint-secretary level for implementation and monitoring
  • The CBIC (Central Board of Indirect Taxes and Customs), under the Department of Revenue, controls customs at ports — its inclusion in the IMG enables real-time clearance flexibility
  • The Ministry of Shipping, Ports and Waterways oversees the 12 major ports (including JNPT, Chennai, Kolkata, Visakhapatnam) which handle the bulk of India's container and bulk cargo
  • Crisis-specific IMGs have precedents: similar bodies were created during COVID-19 supply chain disruptions (2020-21) to fast-track import of oxygen, vaccines, and essential goods

Connection to this news: The IMG's multi-ministry composition directly mirrors the multi-dimensional nature of the crisis — diplomatic (MEA), financial (DFS), logistics (Shipping), energy (Petroleum), and facilitation (CBIC).

India's Export-Import (EXIM) Trade Composition and West Asia Dependency

India's merchandise exports exceeded $776 billion in FY2024, with key sectors including engineering goods, petroleum products, gems and jewellery, textiles, chemicals, and agricultural commodities. West Asia (Gulf Cooperation Council countries + Iran + Iraq + Jordan) constitutes one of India's largest trading blocs. India's trade with the GCC alone exceeds $180 billion annually, making the region critical to overall trade performance.

  • GCC countries: Saudi Arabia, UAE, Qatar, Kuwait, Bahrain, Oman — all share the Persian Gulf and rely on Hormuz for seaborne trade
  • UAE alone accounts for approximately $83 billion of India's bilateral trade (FY2024) — India's second-largest trading partner
  • Key Indian exports to West Asia: textiles, jewellery, rice (basmati), engineering goods, pharmaceuticals, tea, spices
  • Key Indian imports from West Asia: crude oil, LPG, LNG, fertilisers, petrochemicals
  • The bilateral trade surplus India holds with some Gulf countries makes it vulnerable to payment delays if West Asian importers face economic stress from conflict

Connection to this news: The IMG's mandate to monitor shipping, logistics, and critical imports simultaneously reflects that West Asia is both India's largest import source (energy) and a major export market — a double exposure rarely seen with a single geopolitical crisis.

Supply Chain Resilience — Concept and Policy Framework

Supply chain resilience refers to the capacity of a supply chain system to anticipate, adapt to, and recover from disruptions. Post-COVID, it became a major policy focus globally. India's Production Linked Incentive (PLI) scheme (launched 2020–21 across 14 sectors) was partly motivated by supply chain diversification — reducing import dependence on China and building domestic capacity. The National Logistics Policy (NLP), launched in 2022, aims to reduce India's logistics cost from ~14% of GDP to under 8% (comparable to global benchmarks of 8–10%).

  • India's logistics cost as a share of GDP: approximately 13–14%, compared to 8% in developed economies — this makes supply chain disruptions more costly for India
  • The PM GatiShakti National Master Plan (launched 2021) integrates infrastructure planning across 16 ministries to reduce logistics bottlenecks
  • Export Credit Guarantee Corporation (ECGC) provides short-term credit insurance to exporters; during crises, its cover becomes critical for exporters facing payment delays
  • DGFT (Directorate General of Foreign Trade) can issue notifications extending export obligation periods and relaxing documentation requirements during disruptions

Connection to this news: The IMG operationalises India's supply chain resilience framework in real-time — its composition and mandate directly reflect the NLP and GatiShakti principles of multi-ministry coordination around logistics and trade facilitation.

India's Energy Import Vulnerability and Critical Import Management

India is the world's third-largest oil importer and third-largest oil consumer. Approximately 85–87% of India's crude oil requirements are met through imports, with over 60% sourced from Middle Eastern countries. Critical imports from West Asia also include LPG (used by ~330 million households), LNG, fertilisers (urea, DAP), and petrochemicals. Disruption in any of these affects food security, energy security, and industrial output simultaneously.

  • India's crude oil import bill: approximately $132 billion in FY2024
  • India's LPG import dependency: ~55–60% of domestic demand is imported, predominantly from Middle East
  • Fertiliser imports (DAP, MOP): India imports ~60% of its phosphatic and potassic fertiliser requirement; West Asia is a major source
  • The Petroleum Ministry's nodal body for strategic imports is the Petroleum Planning and Analysis Cell (PPAC)
  • India maintains strategic petroleum reserves at Mangalore (1.5 MMT), Padur (2.5 MMT), and Visakhapatnam (1.33 MMT) under Indian Strategic Petroleum Reserves Limited (ISPRL) — combined ~39 million barrels

Connection to this news: The Ministry of Petroleum and Natural Gas is part of the IMG precisely because energy security management — monitoring SPR deployment, alternate sourcing from Russia, US, and West Africa — requires real-time coordination with trade, shipping, and financial bodies.

Key Facts & Data

  • IMG composition: DFS, MEA, Ministry of Shipping Ports & Waterways, Ministry of Petroleum & Natural Gas, CBIC
  • India-GCC bilateral trade: >$180 billion/year; UAE alone ~$83 billion (India's 2nd largest trading partner, FY2024)
  • India's merchandise exports: >$776 billion (FY2024)
  • India's logistics cost: ~13–14% of GDP (target: <8% under National Logistics Policy 2022)
  • Crude oil import bill: ~$132 billion (FY2024); 85–87% of requirements imported
  • LPG: 55–60% imported; fertilisers (DAP, MOP): ~60% imported
  • Strategic Petroleum Reserves: Mangalore (1.5 MMT), Padur (2.5 MMT), Visakhapatnam (1.33 MMT) — total ~39 million barrels under ISPRL
  • PM GatiShakti launched: October 2021; integrates 16 ministries
  • National Logistics Policy launched: September 2022