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Middle East Conflict Strains Global Supply Chains, India Most Vulnerable

The escalating military conflict in the Middle East is creating disruptions across international logistics networks. India faces particular exposure due to its dependence on imported energy.

Lufthansa, Germany's largest carrier, is absorbing nearly $2 billion in additional fuel expenses and has canceled 20,000 flights as operational costs surge. The airline cited "enormous challenges" stemming from regional instability.

Indian Prime Minister Narendra Modi warned citizens that the conflict poses severe risks to the nation's economy, calling for reduced fuel consumption, overseas travel, and gold purchases to offset inflationary pressures. India's inflation rose for a sixth consecutive month in April, with economists citing Middle East disruptions as a persistent risk factor.

Shipping companies report soaring transportation costs alongside weakening consumer demand in affected regions. The combination threatens margin compression for retailers and manufacturers dependent on Middle Eastern markets.