Rising freight costs, fragile supply chains and Gulf tensions threaten India’s $4.5 billion electronics exports, with the UAE’s hub role placing shipments under pressure.
India’s electronics and technology exports to Gulf markets, valued at around $4.5 billion, could be disrupted by the ongoing Iran–Israel conflict, according to a report by The Economic Times. Although India’s direct trade in these products with Iran is negligible, the region’s role as a transit and destination hub makes shipments vulnerable.
The United Arab Emirates (UAE) is central to this concern. Between April and December of FY26, the UAE imported approximately $4.1 billion of Indian electronic goods, making it the second‑largest buyer. The country also acts as a consolidation and re-export hub for smartphones, laptops, servers and components destined for West Asia and Africa.
Much of this cargo moves through Iranian airspace or sea routes near Iran, including the Strait of Hormuz, where heightened military tensions have increased insurance costs and disrupted freight schedules.
Exporters and logistics firms report that spot freight rates to Gulf ports have already risen, while shipping reliability has declined. Some carriers are avoiding high-risk corridors, diverting cargo via longer and more expensive routes.
For low-margin electronics assemblers, these changes could erode competitiveness at a time when India’s electronics exports have been expanding rapidly, supported by production-linked incentive (PLI) schemes and strong demand from the US, UAE and China.
If the conflict escalates or persists, industry insiders warn that order flows to Gulf buyers may face delays, rerouting or partial substitution. Such developments could hinder one of India’s fastest-growing export categories, underscoring the risk of supply chains to geopolitical tensions in the region.
