Story perspectives

Strait of Hormuz Blockade Strains India's SMEs, Sparks Diversification Needs

4/17/2026

Center

India's Economy Struggles

The blockade of the Strait of Hormuz is harming India's economy, hitting SMEs in Kerala and Morbi with higher freight costs and delayed shipments.
Lekha Chakraborty, senior economist, notes that SMEs on thin margins are particularly vulnerable.
The government has provided some relief, but exporters say it is insufficient.
The crisis could drive long-term market losses as buyers turn to Vietnam and Turkey, underscoring diversification needs.

Right

ASEAN Faces Energy Crisis

The ongoing blockade of the Strait of Hormuz exposes ASEAN's energy-security vulnerabilities and its limited influence over the crisis.
Indonesia freezes fuel prices.
The Philippines declares a national energy emergency.
ASEAN relies on external powers, notably the United States, disrupting its security architecture.
The crisis may spur renewable-energy investments and infrastructure, underscoring the need for a collective ASEAN response.

History

Historical Context

The 1980 blockade of the Strait of Hormuz during the Iran-Iraq War disrupted global oil supplies, causing Brent crude prices to surge by 10-13%. Today, similar tensions have emerged as Iran's Revolutionary Guard Corps threatens shipping, prompting ASEAN nations like Indonesia and the Philippines to freeze prices and declare emergencies. This crisis underscores the urgent need for regional cooperation in energy security and may accelerate investments in renewable energy.

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India's Economy Struggles

The blockade of the Strait of Hormuz is harming India's economy, hitting SMEs in Kerala and Morbi with higher freight costs and delayed shipments.
Lekha Chakraborty, senior economist, notes that SMEs on thin margins are particularly vulnerable.
The government has provided some relief, but exporters say it is insufficient.
The crisis could drive long-term market losses as buyers turn to Vietnam and Turkey, underscoring diversification needs.

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