The phrase “God’s Own Country” is often used to describe Kerala. This state faces domestic challenges whenever unrest arises in the Gulf region due to wars or uprisings against monarchies. Since the first Gulf War in the 1990s, the Gulf region has experienced significant instability, including ongoing conflicts, internal security issues, civil wars, and terrorism. During this time, over 170,000 expatriates from Kuwait and Iraq were repatriated to India with government assistance. As a result, remittances to Kerala sharply declined, leading the state government into a fiscal crisis.

The ongoing conflict between the US, Israel, and Iran is worsening the situation in the region. A CNN report highlights the significance of the Strait of Hormuz and points out that the potential for Iranian retaliation against US bases in the Gulf was underestimated. Since Iran began its retaliatory actions, there has been growing concern among the workforce throughout the region. The US and Israel launched their attacks on Iran on February 28, 2026, and the conflict has now entered its third week. What was initially perceived as a dispute solely among the US, Israel, and Iran is now affecting the global economy.

The ongoing conflict in Iran significantly impacts India, as it depends on the Gulf for 85% of its energy needs. The Strait of Hormuz is a critical route for transporting crude oil and LPG. Iran’s decision to close this strait has disrupted oil imports, creating challenges for India. Currently, about 35% of India’s crude oil imports pass through the Strait, raising concerns about the safety of sailors and vessels navigating this route. As India continues to pursue clean energy initiatives, the demand for LPG is increasing, making it the second-largest importer of LPG, primarily from the Gulf. Notably, Qatar supplies around 35% of India’s total LPG imports.

The situation is further complicated by the presence of Al Udeid Air Base in Qatar, which is the largest U.S. military facility in the region. In response to U.S.-Israeli attacks, Iran has retaliated with drones and missiles. As a result, Qatar temporarily halted its LPG (liquefied petroleum gas) supply, raising concerns about potential disruptions in India.

According to a report by the Economic Times, the daily consumption of commercial LPG cylinders in Kerala’s Ernakulam District ranges from 800 to 1,000 cylinders. Today, opposition MPs in the Indian Parliament raised concerns about price increases for commercial cylinders and indicated that hotels are facing supply difficulties. However, the government responded by stating that there are no supply issues in the market and that they have increased supply by 30%. Therefore, if the conflict continues, it is likely to cause panic among consumers.

Additionally, Kerala’s economy is heavily dependent on remittances from expatriates working in the Gulf. One in four families in Kerala has a member employed in the Gulf. Trivandrum International Airport alone connects to the Gulf States with 13 daily flights, while Cochin International Airport hosts over 25 airlines operating multiple daily flights to West Asia. In 2014, approximately 2.4 million expatriates from Kerala resided in the Gulf, with the Kerala Migration Survey (KMS) indicating that most worked in the UAE and Saudi Arabia.

Over the past two decades, migration patterns have shifted toward developed countries such as Canada, the United States, and various European nations in search of higher salaries. However, the Gulf region remains a primary destination for job seekers from Kerala. As of 2026, it is expected that around 9.5 million Indians will be employed in the Gulf, with approximately 3 to 3.5 million coming from Kerala alone. This number represents roughly 10% of Kerala’s population and one-third of India’s workforce in the Gulf, according to the South China Morning Post.

Kerala receives approximately ₹1,600 crore each month from remittances. In the 2023-24 fiscal year, expatriates from Kerala contributed $23.39 billion to the state’s economy. The ongoing conflict in Iran is impacting India’s energy sector, which, in turn, significantly affects households and society in Kerala. Ensuring the safety of workers in the Gulf is essential, as these remittances are crucial for the daily lives of Keralites.

The conflict has led to significant emotional distress among expatriates, many of whom are unable to visit their families for the Easter holidays because air ticket prices have skyrocketed, with some reaching as high as ₹1 lakh. This situation raises concerns about the potential postponement of family gatherings and weddings.

Kerala’s economy significantly relies on remittances from workers in the Gulf. Addressing the challenges of this dependence will not be quick or easy. The uncertainty surrounding returning migrants, especially if the ongoing war does not end soon, presents a substantial issue. The ruling Left Democratic Front (LDF) government aims to secure a third consecutive term. At the same time, the main opposition, the United Democratic Front (UDF) alliance, hopes to regain power after a decade. Nevertheless, both parties face significant hurdles due to the uncertainties brought by the war as the elections approach in April.

Economists warn that a prolonged conflict could lead to job losses, halted projects, and negative impacts on households. Reports from the hotel industry in Kerala suggest that the cylinder crisis will significantly affect their business. As the war continues, its unpredictable consequences are expected to influence voter behaviour in the state assembly elections scheduled for April 9, 2026.

© Eurasia Review