Israel-Hamas Conflict: Impact on Global Economy and India’s Stance

Gaurav Soni October 25, 2023 03:49 16975 1

The Israeli Prime Minister declared a ‘state of war’ after Hamas militants infiltrated Israeli territory, wreaking havoc.

Israel-Hamas Conflict: Impact on Global Economy and India’s Stance

Context:

The Israeli Prime Minister declared a ‘state of war’ after Hamas militants infiltrated Israeli territory, wreaking havoc.

Israel-Hamas Conflict Live Update

According to Palestinian Health Authority, conflict between Israel and Palestine enters its third week on 23rd october,
- Casualty: Over 5,100 Palestinians have died in the Gaza Strip, with about 40 percent of those killed being children.
According to Israeli military, it had carried out over 300 airstrikes on Gaza.
- Officials claim that 1,400 people have died in southern Israel so far after attacks by Hamas.

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About the Recent Israel-Hamas Conflict:

Attackers: The gunmen of the militant group Hamas have attacked Israeli troops and taken many civilians hostage. This has caused a state of emergency in the country.
Reasons: Hamas has referred to the attack as a response to military raids of Israel in the West Bank and violence at al-Aqsa Mosque in Jerusalem.
Casualties: More than 5,000 rockets were launched from the Hamas-controlled Gaza Strip. People on both sides of the border have suffered casualties due to the conflict.
Operation Iron Swords: Israel Defense Forces (IDF) have launched Operation ‘Iron Swords’ in retaliation for an unprecedented and “surprise” attack by Hamas.

Israel

Who is Hamas?

Hamas is a Palestinian Islamist militant group that rules the Gaza Strip. It has been designated as a terrorist group by Israel, and the Western world.
Hamas is tactically supported by Iran which funds it and provides weapons and training to its members to carry out attacks.

What is the Gaza Strip?

Location: It is a Palestinian enclave on the coast of the Mediterranean Sea. It shares a border with Israel and Egypt’s Sinai Peninsula.
- The Gaza Strip along with West Bank makes up the State of Palestine. Both these territories are separated by Israel.
Administration: Since winning a majority in 2006, the Gaza Strip has been ruled by Hamas, which is considered a politico-military organisation.
- Israel has control of air space over Gaza and its shoreline. It has imposed restrictions on the movement of goods into the Gaza Strip. Egypt also controls the border it shares with Gaza.

What is West Bank?

Location: It is a land-locked territory, which shares its borders with Israel and Jordan. The Dead Sea forms a part of its border.
Administration: A part of Jerusalem city comes under West Bank. The area is ruled by Fatah, which was known formerly as the Palestinian National Liberation Movement.

Timeline of the Events:

Background: The Israel-Palestinian Issue:

Origin of Conflict: The conflict is one of the world’s oldest military and political conflicts. Despite many attempts to resolve the issue, there has been no major breakthrough.
- The issue started prior to the First World War when there was a demand for a Jewish homeland in Palestine. The issue kept on simmering due to waves of Jewish migration into the Palestinian territory.
The Balfour Declaration of 1917 by the British government gave support to the demand for a Jewish homeland in British-controlled Palestine.
United Nations General Assembly in 1947 recommended the adoption of a plan to partition Palestine into an Arab state, a Jewish state and the City of Jerusalem.
- There was a state of conflict between Arab groups and Jewish groups. As the conflict continued, Jewish forces captured more territories.

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Escalation of Conflict: A Jewish state was established in 1948. This was opposed by the Arab League, which decided to intervene.
- This triggered the 1948 Arab-Israeli war. Following a ceasefire agreement, it managed to hold onto its mandated territory while Jordan occupied the West Bank and Egypt occupied the Gaza Strip.
- After the Six-day War of 1967, It managed to capture the West Bank from Jordan and the Gaza Strip from Egypt.
Current status: Following the Oslo Accords of 1993, Israel allowed the setting up of Palestinian authority in the West Bank and Gaza Strip.
- In 2006, Hamas gained control over the Gaza Strip following the Battle of Gaza (2007).
- Currently, Hamas rules the Gaza Strip while the West Bank is controlled by Fatah. Both factions have different equations with Israel.

Impact of the Conflict on the World:

Global Shipping: There could be a rise in global shipping charges due to an increase in insurance premiums as a result of instability in West Asia.
Oil Prices: The conflict could also trigger a global oil crisis as middle-east supply chain will be affected due to instability. This could escalate the cost of crude oil.
Regional Instability: The conflict could soon escalate into a state of war with global players such as Russia, the US and Iran drawn into it, either willingly or unwillingly.
Global Economy: The global economy, which is already in a state of recession due to the Ukraine conflict, will further deteriorate as a result of the events.
Global Bipolarity: The world is increasingly moving towards bipolarity, with the two poles being the Western world and the Russia-China axis. The conflict could push many countries to choose a side.
Israel-Arab World Relations: Israel’s relations with the Arab world, which was moving towards normalisation, could witness a reversal as an effect of these events.
Delay in Two-State Solution: The two-state solution, which has been pending for many years, will be further delayed. The ultimate sufferers will be Palestinian civilians.
Nuclear Conflict: Iran and Israel, armed with nuclear weapons, could start a nuclear war. This could affect the whole of humanity.
- Iran’s role in the whole event is visible in the form of tactical support to Hamas.
Air Traffic: Global air traffic over the area would be affected due to the volatile situation in the region.

Challenges in Achieving Peace:

Jerusalem: Both Israel and Palestine consider Jerusalem as their capital. It is a bone of contention due to its religious importance for both Jews and Muslims.
Proxies: The Palestinian territories are host to proxy groups representing regional players. They are not in favour of an amicable solution.
Arab Support: Till recent times, Arab countries have been demanding a reversal of Israeli occupation of Palestine for long-lasting peace. This acted as a barrier to a permanent solution.
Right-Wing Politics: Right-wing politics in Israel and Palestine do not favour compromise. This prevents a negotiation.

Impact on India:

Indian Exports: Indian exporters will have to bear additional insurance costs due to the conflict. This could harm the competitiveness of Indian goods.
- India’s current trade is about $10.7 billion, could be seriously impacted.
Diplomatic Stance: India, which is in favour of a two-state solution, may need to alter its diplomatic position due to the changing dynamics of the war.
- The nature of the attack on civilians has already forced India to condemn it.
Indian Citizens and Diaspora: Indian citizens stranded in Israel would need to be evacuated as soon as possible to prevent loss of lives. The lives of the Indian diaspora living in these countries could also be affected.
Defence Imports: Israel is one of India’s largest sources of defence equipment. The conflict could delay India’s own defence consignments, which is a serious concern in light of the Chinese build-up along the Himalayan border.
- Currently, the defence trade is worth over Rs 74,000 crore.
Ties with Middle-east: India’s relations with the Middle-Eastern countries are at an all-time high. The conflict could hamper India’s planned projects, including the India-Middle East-Europe mega economic corridor.
Shipping Routes: A state of conflict in the region could affect shipping along the Suez Canal. This will affect India’s trade with Europe.

India’s Potential Stand on the Issue:

Condemnation: The Indian Prime Minister has condemned the attack on Israeli territories by Hamas. He has expressed solidarity with the citizens.
- The event has been dubbed as a ‘terrorist attack’ due to the use of civilians as a target.
India’s position: India, itself being a victim of terrorism, has a compulsion to denounce any such incidents across the world.
- In the absence of denouncement, it will send a wrong message to the rest of the world when it comes to its stand on terrorism.
Long-term position: However, when it comes to the larger Israel-Palestine issue, India has always been in favour of a peaceful solution, which respects the rights of all the parties.
Final outcome: In continuation of its policy, India is likely to call for a peaceful end to the conflict. It will push for talks between the two warring parties.

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A Potential Solution to the Conflict:

One-state solution: This plan aims to form a state between the River Jordan and the Mediterranean.
- A single state will be formed by including Israel, the West Bank and Gaza Strip.
Two-state solution: Two countries will be created in the form of Israel and Palestine.
- It will host a Jewish population while Palestine will be for Arab Muslims.
Implementation of Oslo Accords (1993): Oslo Accord is an ongoing American-mediated effort to broker a peace treaty between Israel and Palestine.

Conclusion

The ongoing conflict has escalated geopolitical tensions. Achieving a peaceful resolution of the issue requires collective efforts from the international community.
The current reluctance of the Israeli government and other stakeholders exacerbates the problem.
A balanced approach is crucial, not only for fostering favorable relations with Arab countries but also for maintaining a constructive engagement with it.

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Israel FAQs

The conflict started following the declaration of independence by Israel in 1948. Since then the issue has escalated owing to Israel’s expansionism.

Israel, Palestinian authorities, Hamas, the Western Axis, the Arab League, the UN etc are all stakeholders in this conflict.

The main reasons include the issue of occupation by Israel, apart from the right of self-determination for Palestinians. The use of proxies by regional players is also a reason.

The issue has impacted India in all forms, including diplomacy, trade, defence as well as strategic ties with Arab countries.

When it comes to the larger Israel-Palestine issue, India has always been in favour of a peaceful solution, which respects the rights of all the parties.

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Israel-Hamas Conflict: Impact on Global Economy and India’s Stance

Context:

Israel-Hamas Conflict Live Update

About the Recent Israel-Hamas Conflict:

Who is Hamas?

What is the Gaza Strip?

What is West Bank?

Timeline of the Events:

Background: The Israel-Palestinian Issue:

Challenges in Achieving Peace:

Impact on India:

India’s Potential Stand on the Issue:

A Potential Solution to the Conflict:

Israel FAQs

What is the history of the Israel-Palestine conflict?

Who are the major stakeholders in the conflict?

What are the main reasons for the conflict?

How has the conflict impacted India?

What is India’s position on the Israel-Palestine issue?

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