26 March 2026

As War Disrupts India’s Gulf Ties, Economy Faces ‘New Broadside’

Alex Travelli

India was one of the fastest-growing major economies, consistently outpacing its powerful neighbor, China. It had surpassed Britain to become the world’s fifth-largest economy and was within striking distance of overtaking Japan for fourth. In a world beset by risks — from the war in Ukraine to President Trump’s tariff campaign — India’s skilled labor force, fiscal discipline and strong currency reserves made it a relatively safe bet.

An underappreciated component of the momentum was India’s deepening ties to the Arab countries of the Persian Gulf. But that advantage is now turning into a liability.

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