Over 2.1 Million Indians May Fall Into Poverty Trap Due To Iran War: UNDP

While the Iran war is affecting almost every country in the world in terms of its economic impact, a humanitarian crisis is also staring at the world.

After Iran, India would be the most affected on that front, according to an estimate by the United Nations Development Programme.

While the war may push about 3.8 million people into poverty in Iran, the highest in the world, India may follow next with an estimated 2.1 million people falling into the trap.

“Iran records the largest increase, from about 1.2 million to over 5.0 million, followed by India, where poverty is expected to rise from around 400,000 to 2.5 million, and Pakistan, from about 73,000 to over 420,000,” the UN said in its report titled ‘Military Escalation in the Middle East: Human Development Impacts Across Asia and the Pacific’.

The report also noted that the repercussions of the war would impact human development progress in Asia.

It estimated a loss of approximately 0.03–0.12 years of HDI progress in India, followed by Nepal at around 0.02–0.09 years and Vietnam at 0.02–0.07 years.

For China, the estimated effects on HDI remain limited in magnitude, ranging roughly 0.01–0.05 years. Pakistan also experiences losses in the range of 0.01–0.04 years, the report said.

The report highlighted the dependence of Asia on the Gulf region for food, fuel, fertiliser, and other agricultural inputs.

“In some parts of South Asia, including Bangladesh, India, Pakistan, and Sri Lanka, they may be further compounded by export linkages to Gulf markets, which can shrink farm incomes, constrain access to key inputs, and disrupt production,” the report said.

In India, the timing of the war is especially sensitive as any prolonged disruption would coincide with preparations for the Kharif (the monsoon cropping season), which begins in June.

Urea stocks stood at 6.114 million tonnes, providing a near-term buffer but not fully insulating the sector if disruptions persist into the planting season, the report warned.