Key export relationships include agricultural products such as tea to Russia, basmati rice to Iran, and textile raw materials to Bangladesh.

Global geopolitical tensions are being shaped by overlapping conflicts and changing strategic relationships, with significant effects on global security and trade. The Russia–Ukraine war continues to disrupt energy and commodity markets, while rising tensions between Iran and Israel increase risks to stability and oil supplies in West Asia. Political unrest in Bangladesh, the crisis in Venezuela, and the Thailand–Cambodia border dispute add further uncertainty. These developments are influencing trade, supply chains, and diplomatic engagements. For India, which is closely connected to some of these regions, the changing environment has important implications for external trade and sector-specific risks. In this report, ICRA has assessed how these geopolitical dynamics affect India’s trade and financial flows, with a focus on the most impacted sectors.

• Russia, Ukraine, Iran, Israel, Bangladesh, Venezuela, Thailand, and Cambodia are among the countries experiencing ongoing conflict, political instability, or geopolitical tensions. Together, these eight countries account for about 10% of India’s total trade, with Russia contributing 6%, followed by Thailand and Bangladesh at around 3% each in FY2025. Trade with Israel, Venezuela, Ukraine, and Cambodia remains sub-1%.
• India–Russia trade grew at a strong 39% CAGR between FY2016 and FY2025, driven largely by higher petroleum imports, which widened the trade deficit for India. Trade with Thailand expanded at a 7% CAGR, though faster import growth led to a deficit. India–Bangladesh trade increased at a 7% CAGR over FY2015–FY2025, and despite higher imports, India maintained a trade surplus in FY2025, with exports nearly six times the value of imports.

Source: Ministry of Commerce and Industry; ICRA Research