The Iran war and the uncertain future of the expats Premium

The Iran war jeopardizes Gulf stability, impacting Indian expats' livelihoods and reshaping economic dynamics in the region.

With the Iran war casting a long shadow over the Gulf over the past two weeks, what once appeared to be a region of glittering airports, financial hubs and endless construction now looks extremely vulnerable. India has already acknowledged the seriousness of the crisis. The Ministry of External Affairs had said that within less than a week of the war in the Gulf region beginning, more than 52,000 Indians had already returned from the Gulf under special arrangements, and the number may rise in the coming days. India has also issued repeated advisories on West Asia, showing that this is a real regional emergency.

For the Gulf Cooperation Council (GCC) states, the danger is not only military but structural. These states built their prosperity on stability, open sea lanes, energy exports, global finance and migrant labour. A prolonged war threatens every one of these pillars. Iran’s strategic logic is also clear enough. Tehran sees several GCC monarchies not as neutral neighbours but as part of a wider U.S.-led security architecture in the region. That perception is influenced by the long presence of Western military bases and by the political afterlife of the Abraham Accords, which began formal normalisation between Israel and the UAE and Bahrain in 2020. In Iran’s view, the Gulf cannot claim neutrality while remaining tied to American security power and, in some cases, to new arrangements with Israel.

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The socio-economic implications are severe. Even where missiles do not land directly, fear itself can become an economic weapon. Insurance costs rise. Shipping routes become uncertain. Investors retreat. Aviation schedules are disrupted. Tourism slows. Energy markets become volatile. The Strait of Hormuz remains the region’s most sensitive chokepoint, and any threat there immediately affects oil and gas flows.

The GCC states have tried to diversify, especially the UAE and Saudi Arabia, but diversification does not remove vulnerability. It only changes its form. Dubai depends on confidence, connectivity and circulation. Saudi Arabia’s large-scale transformation plans require enormous capital and long-term predictability. Qatar’s strength in liquefied natural gas depends on uninterrupted maritime movement. Oman’s ports depend on trade stability. In short, the Gulf’s prosperity rests not only on oil, but on the belief that it is safer than the rest of West Asia. War damages that belief.

The deepest wound, however, falls on migrant workers. The GCC hosts over 25 million Asian migrants, making it one of the largest labour migration corridors in the world. Indians form one of the GCC’s biggest communities. Official Indian data puts the Indian-origin population in the UAE at over 3.4 million and in Saudi Arabia at nearly 2.6 million; Qatar also hosts a fairly large Indian community. For Kerala, this is not an abstract number. Kerala Migration Survey 2023 found that remittances amounted to 23.2% of the State’s Net State Domestic Product, showing how deeply the State’s economy is tied to migration income. The same report underlined that remittances were 1.7 times the State’s revenue receipts. That means any Gulf shock quickly becomes a Kerala social crisis.