BENGALURU: From petrol pumps to farm markets, the impact of rising tension in West Asia could spread across Karnataka’s economy. State’s transport and agriculture sectors may face immediate pressure if global oil prices climb, as any break in crude supply routes could push up diesel and petrol prices, triggering a chain reaction across not only in the state transport sector, but also hit exports and industries.
With respect to Karnataka, major sectors to be hit would be the transport industry and agriculture sector and is expected to bear the brunt due to its dependence on transport. Ramesh Chandra Lahoti, Advisor of Agricultural Produce Market Committee (APMC), said that nearly 80% of goods movement, including agricultural produce, depends on road transport. If diesel prices increase, it will directly add to overall costs.
“Even a marginal hike in diesel prices will raise freight charges and push up essential commodity prices,” he said. Lahoti adds that agricultural exports of pulses and spices could also suffer. “Rice exports will be especially vulnerable and prolonged disruption could affect both farmers and exporters,” he said.
Karnataka, a major rice-producing state, relies on Gulf transit hubs such as Dubai for shipments of rice, pulses and spices to West Asia, Europe and beyond. Dubai serves as a key transit and storage hub for Indian goods headed to markets in the Middle East, Europe and parts of the Americas. Any delay in vessel movement or restrictions on port access could create bottlenecks, he says.
“Industrial operations may face delays due to uncertainties in the supply chain. If raw materials are not delivered on time and freight charges rise, production schedules will be hit,” said industrial expert K Shiva Shanmugam, adding that the impact may not be immediate but could be visible over the next few weeks if tensions continue.
He added that any disruption to sea routes would increase shipping costs, directly impacting imports and exports. Higher petrol and diesel prices could in turn push up transportation costs, triggering a rise in prices of essential commodities such as vegetables, foodgrains and other goods. Tourism may weaken if travel is disrupted, while a spike in oil prices could pressure the rupee, increasing import costs.
Industrialists say any disruption in crude oil supplies would immediately push up petrol and diesel prices, setting off broader inflationary pressures.
“If fuel prices rise, all essential commodities will automatically become costlier. Everything is interlinked,” said Balaji Rao, president of the Bengaluru Petroleum Dealers’ Association. Transport costs, he noted, directly influence the prices of food, groceries and other daily-use items in Karnataka.
While experts describe a full-scale war as unlikely, they agree that if tensions escalate, the ripple effect across Karnataka’s economy could be swift and far-reaching.
