Iran war fallout puts 9 million Indian workers in the line of fire
As missiles fly, drone strikes from Dubai to Doha are shattering the illusion of safety for millions of Indian expats living in the Gulf
When the alert arrives on his phone, Yashwant Deshmukh knows exactly what to do.
The Dubai-based political analyst moves away from the windows, waits for the second message confirming the missile has been intercepted, and then goes back to work.
“It has become a drill,” he said.
“It is the collapse of the long-standing assumption that the GCC states would remain insulated from crises in the Persian Gulf.”
Fear takes hold
The collapse in confidence is evident on Indian expatriates’ social media feeds.
On March 6, videos showed a building in Dubai’s Creek Harbour neighbourhood, an affluent stretch of residential towers and luxury hotels, on fire after a drone strike. No casualties were reported following a timely evacuation.
Iran’s intent appeared to be the deliberate sowing of widespread fear, Deshmukh said.
“There is anxiety when drones and missiles are flying over your head,” he said. “But there is a clear line between anxiety and panic.”
For many, that line has not yet been crossed, according to Deshmukh. The local authorities are still in control.
The southern Indian state of Kerala alone has an estimated 3 million of its citizens working in the Gulf – or roughly 10 per cent of its entire population.
“This could disrupt Gulf remittances to Kerala,” said Harsh Ramaswamy, an independent political commentator based in India. “The impact will also be felt by many workers in small jobs, such as hotels, if the conflict prolongs.”
The risk is not distributed evenly. While Indian expatriates in the Gulf include corporate executives and white-collar professionals, it is the blue-collar workers – the hotel employees, labourers and drivers – who analysts say have the least cushion against disruption.
“For lower-income migrants, this is not just an inconvenience,” Chandra said. “They tend to have limited savings, depend on scheduled leave and cannot simply pay for higher ticket prices, extra hotel nights, lost workdays and uncertainty over their future visa and employment status.”
Ramaswamy put it more starkly. “Once they leave, they won’t know where to go. Ultimately, it is the ordinary Indians who would suffer in an exodus.”
A new insecurity
For those who have tried to leave, flight cancellations and airspace closures have left tens of thousands stranded across Gulf airline hubs.
Diversions and fare spikes have made the journey home vastly more difficult and expensive for those who can least afford it.
The crisis has also ignited a political backlash. Opposition leaders and activists have demanded that New Delhi launch urgent repatriation operations for workers stranded in the region.
India’s Foreign Minister S. Jaishankar told the upper house of parliament on Monday that more than 67,000 Indians had returned via contingency flights – a significant figure, though one that represents a fraction of the total Indian population in the Gulf.
Analysts largely expect those departures to be temporary. Once flights normalise and a semblance of stability returns, so will many of the workers.
Few would relocate to India permanently, Ramaswamy predicted. “Only migrants who go for a short period will come back [for good],” he said. “They have their own lives there.”
If the war drags on for months, it would fundamentally change the calculations of millions of Indian workers and those who depend on their earnings.
The ripple effects extend well beyond India. The Gulf has long served as a major labour destination for workers from Pakistan, Bangladesh, Nepal and Sri Lanka, with foreign nationals making up more than half the population of many GCC countries – most of them without any path to long-term residency.
Remittances from the Gulf are equivalent to around 1 per cent of India’s gross domestic product, 3 to 5 per cent in Pakistan, Bangladesh and Sri Lanka, and nearly 10 per cent in Nepal, according to Capital Economics.
A prolonged conflict would weigh on demand for migrant labour and throttle those remittance flows, the London-based macroeconomic research firm warned.
“A collapse in remittances seems unlikely,” said Shilan Shah, Capital Economics’ deputy chief emerging markets economist. But any meaningful drop would widen external deficits across much of South Asia at a time when high energy prices are already straining economies.
“There is a growing sense that the petrodollar economy in the GCC may no longer be safe to live and work in,” Chandra said.
“Undoubtedly, this is a new kind of Gulf insecurity. War has moved close to the urban nodes around which Indian expat life, mobility and labour are organised.”
For years, the Gulf was where ordinary people went to build extraordinary lives.
Whether it can still be that place is the question millions of families are now asking.