United Nations Development Programme (UNDP) has released a report titled “Military Escalation In The Middle East: Human Development Impacts Across Asia And The Pacific”, warning that the ongoing West Asia conflict is reversing years of developmental gains across Asia-Pacific region. The report synthesises impact assessments covering 36 countries, complemented by macroeconomic simulations. The military escalation began on February 28, 2026 and has sent shockwaves through global energy markets, trade routes, and financial systems.
Key Global & Regional Findings
- 8 million people across 14 simulated countries are at risk of falling into poverty
- Strait of Hormuz: through which approximately one-fifth of global oil supply normally transits has experienced severe disruption
- Over 80% of crude oil and LNG transiting the Strait of Hormuz is destined for Asian markets
- Iran faces the steepest HDI decline equivalent to 1 to 1.5 years of progress lost
- South Asia faces the most pronounced losses due to higher exposure to income and price shocks and limited policy buffers
- Women are the most vulnerable across all risk categories
- Most at-risk groups: low-income households, informal workers, migrants, and small enterprises
India-Specific Impact
Energy Dependence:
- India meets over 90% of its oil needs through imports, sourcing more than 40% of crude imports and 90% of LPG imports from the Middle East. West Asian countries supply over 45% of India’s fertilizer imports, while 85% of domestic urea production depends on imported Regasified LNG (RLNG).
Poverty & Human Development:
- Poverty in India is expected to rise from around 4 lakh to 2.5 million people. India is projected to experience a loss of approximately 03–0.12 years of HDI progress.
Employment & MSME Impact:
- With ~90% of India’s employment being informal, employment risks are especially pronounced in MSME-intensive sectors reliant on imported energy- including hospitality, food processing, construction materials, steel-based manufacturing, and gems & diamonds. These pressures could translate into reduced working hours, job losses, and business interruptions, particularly for informal and migrant workers.
Food & Agricultural Security:
- Any prolonged disruption would coincide with Kharif season preparations (beginning June). Urea stocks stood at 114 million tonnes, providing a near-term buffer but not fully insulating the sector if disruptions persist. Food and fertilizer price increases hitting ahead of key planting cycles threaten to deepen food insecurity in South Asia.
Healthcare Costs:
- Raw material costs for medical devices are expected to rise by around 50%, while wholesale prices of medicine have already risen by 10–15%.
Remittances:
- Reduced Gulf economic activity could weaken remittance inflows, further squeezing household incomes and purchasing power.
Government Responses Across Region
Governments have responded through fuel price stabilisation, targeted subsidies, limits on transport costs, and early adaptive measures such as diversifying energy supply and improving energy efficiency. Some countries have also introduced nationwide energy-saving campaigns and temporary changes to public-sector work arrangements.