Editorial

The arrival of S. Jaishankar in France for the G7 Foreign Ministers’ meeting comes at a moment of extraordinary geopolitical tension. With the escalating crisis in West Asia and growing concerns over the security of the Strait of Hormuz, India finds itself navigating a delicate but decisive diplomatic terrain.

The Strait of Hormuz is not merely a maritime passage; it is the lifeline of global energy flows. Nearly a fifth of the world’s oil supply transits through this narrow corridor. For India, which imports over 80% of its crude oil, any disruption here is not a distant strategic concern but an immediate economic threat. Rising tensions involving Iran, Israel, and Western powers have heightened fears of blockades, military confrontation, or proxy escalations that could destabilize global markets.

Jaishankar’s presence at the G7 table is thus significant. Although not a member, India’s inclusion reflects its growing geopolitical weight and its role as a bridge between the Global South and Western powers. New Delhi’s approach has traditionally been guided by strategic autonomy—maintaining relations with competing blocs while avoiding entanglement in conflicts. However, the current crisis tests the limits of this balancing act.

India’s stakes in West Asia are multifaceted. Beyond energy security, the region hosts over eight million Indian expatriates whose safety is paramount. Moreover, India has carefully nurtured ties with both Israel and key Arab nations, while also maintaining pragmatic engagement with Iran. In such a complex matrix, any overt alignment risks undermining long-standing partnerships.

At the G7 meeting, India is expected to emphasize de-escalation, dialogue, and the importance of keeping critical sea lanes open. The call for ensuring freedom of navigation in the Strait of Hormuz aligns with international law and India’s broader vision of a stable, rules-based order. Yet, the challenge lies in translating diplomatic consensus into actionable restraint among adversarial powers.

Critically, India must also guard against being perceived as passive. Silence or ambiguity, particularly on humanitarian concerns in conflict zones, could erode its moral standing. As an emerging global voice, India is increasingly expected to articulate not just its interests but also its principles.

Jaishankar’s diplomacy in France, therefore, is more than routine engagement—it is a test of India’s global posture. In a fractured world, India must demonstrate that strategic autonomy does not mean strategic silence, but rather a calibrated assertion of both national interest and global responsibility.

As the Iran-Israel-US conflict enters a critical phase on March 27, 2026, global financial markets are grappling with heightened uncertainty. Indian benchmark indices opened lower, with the Nifty trading around the 23,100-23,116 levels in early deals amid a gap-down start, while the Sensex mirrored the weakness. This comes against the backdrop of Brent crude hovering near or above $100-104 per barrel, driven by fears over disruptions in the Strait of Hormuz—the chokepoint for nearly a fifth of global oil supplies.

The escalation in West Asia has triggered a classic risk-off sentiment. Equity investors are trimming exposure to growth-sensitive assets, fearing prolonged supply shocks, higher inflation, and potential slowdown in global trade. For India, the world’s third-largest crude importer, the surge in oil prices directly threatens energy security, widens the current account deficit, and could stoke domestic inflation. Sectors like aviation, logistics, automobiles, and manufacturing face margin pressure, while oil marketing companies and related stocks remain under watch despite some earlier relief from partial de-escalation signals.

Conversely, gold and silver have seen renewed safe-haven demand in India. While prices have fluctuated in recent weeks—with periods of profit-taking even amid tensions—geopolitical risks continue to underpin buying interest. Domestic gold rates, which had climbed sharply in early March to levels near ₹1.73 lakh per 10 grams before some correction, are again attracting investors seeking protection against currency volatility and inflationary risks. Silver, often more volatile, follows a similar pattern, serving both as an industrial metal and a hedge.

This divergence—falling equities alongside rising or resilient precious metals—highlights the fragile psychology dominating markets. Global cues reinforce the trend: Wall Street has seen volatility, with energy stocks gaining but broader indices pressured by recession fears if the conflict drags on. Central banks worldwide face a renewed dilemma—balancing growth risks from high energy costs against inflationary pressures that could delay rate cuts.

For India, the situation demands prudence. The government and RBI are closely monitoring fuel prices, with potential implications for LPG and diesel costs affecting households and industry. Diversification of energy sources, strategic reserves, and diplomatic efforts to keep shipping lanes open remain crucial. PM Modi’s reported high-level review with Chief Ministers underscores the seriousness with which New Delhi views energy security and economic resilience.

Yet, history offers perspective. Geopolitical shocks often cause sharp but temporary market reactions. If diplomatic channels— including any Trump-brokered pauses or negotiations—yield progress, oil prices could moderate, easing pressure on indices. Until then, volatility is likely to persist. Investors should avoid knee-jerk decisions, focusing instead on quality businesses with strong balance sheets that can weather cost shocks.

• SAS Kirmani