The war in Iran has led most South Asian countries to adopt a cautious stance on the conflict. Some have maintained a neutral position, asserting their foreign policy postures, while others have maintained a careful balance by not condemning US-Israel attacks but have criticised Iran’s attack on US allies.

India condemned Iran’s attack on Gulf countries but refrained from condemning the US-Israel attack on Iran while signing the condolence book on the death of Iran’s supreme leader, Ayatollah Syed Ali Khamenei. Bangladesh also called for restraint and dialogue while condemning Iran’s attack on Gulf countries, followed by an expression of sorrow on the assassination of Khamenei and offered condolences to the ‘brotherly people’ of Iran.

Pakistan, which witnessed violence that killed 20 people, mainly Shias, in the aftermath of Khamenei’s killing, condemned the US-Israel attack on Iran and stated that the killing of the supreme leader was a gross violation of international law. Sri Lanka also followed the diplomatic tightrope walk that other countries in the region did. The Maldives is the only country in South Asia that severed its ties with Israel following the attack on Iran. It denounced attacks from all sides and urged an immediate de-escalation of tensions.

Energy, remittances and GDP

Many South Asian governments are conscious of the sentiments of their large Muslim population, their energy dependence on the Gulf, the remittances—the backbone of their GDP—that their expatriates send and foreign exchange earnings. Indian Prime Minister Modi expressed concerns about the obstruction of international waterways in the Strait of Hormuz, which affects India’s energy imports. The Indian government has repeatedly assured the supply of cooking gas and fertilisers to citizens. Addressing the Parliament, Modi also informed that the government has diversified ‘import sources from 27 countries to 41 countries over the past 11 years’.

Bangladesh, which imports around 95 percent of its energy, is heavily dependent on LNG imports from the Gulf. However, it decided to shut down schools on March 8 until Eid and to ration fuel, as 65 percent of its electricity production depends on imported fuel. India has agreed to supply an additional 45,000 metric tons of diesel to Bangladesh by April. Sri Lanka, which is recovering from the economic crisis, has announced a four-day work week, rationed petrol through QR codes, increased petrol prices by 20 rupees and shut offices to cope with the energy crisis. It has also requested India for an uninterrupted supply of petroleum products.

Similarly, the Maldives spends $443.6 million per year on diesel imports, which is used to generate electricity. It has requested India to supply petroleum products as oil prices have spiralled following the war, impacting its foreign currency reserve. This escalation will likely impact the country’s debt-servicing capacity as well. Nepal has hiked the rate of petrol by Rs15 per litre. Nepal’s southern neighbour, India, is considering supplying additional petrol to meet the country’s energy demand. It has also requested an additional 3,000 tonnes of LPG per month, in addition to the 48,000 tonnes it currently purchases, leveraging its agreement with Indian Oil Corporation. Pakistan has increased the price of petrol by 55 Pakistani rupees—the highest among South Asian countries.

India received $40 billion in remittances from the Gulf countries last year. For Bangladesh, the Gulf region accounted for $15 billion in remittances in the 2025-26 financial year, which constitutes 59 percent of the total remittances the country receives. Concomitantly, Pakistan received $26.5 billion in remittances from these countries. Remittances from the Gulf accounted for 10 percent of Nepal’s GDP. Similarly, Gulf countries remain the top destinations for workers from Sri Lanka and the Maldives. But the war has not only disrupted flights but also resulted in the loss of the lives of migrant workers from South Asia.

Geopolitical fallout

Pakistan, a country bordering Iran, which also has a defence cooperation agreement with Saudi Arabia, is treading a cautious path and has offered to mediate. While India, which established connectivity with Central Asia through Iran, has called for peace and dialogue.

As South Asian countries have to balance their relationships with the US and Gulf countries on one hand and Iran on the other, development so far suggests how difficult it is to maintain a careful balance. The torpedo attack on March 4 from a US submarine on an Iranian Navy vessel, IRIS Dena, as it left Indian water, killing 130 sailors on board, showed how close the war had come. Foreign Minister of India, Dr S Jaishankar, clarified that India had offered a docking facility to Iris Dena, but it sailed away. Sri Lanka rescued around 32 sailors. Immediately after the incident, India permitted IRIS Lavan to dock, and Sri Lanka allowed IRIS Bushehr to dock. All three ships participated in the MILAN 2026 exercise hosted by India in February this year.

The Sri Lankan government claims it has acted neutrally in this regard. President Anura Kumara Dissanayake said the country refused a request by three Iranian ships to visit Sri Lanka on a goodwill visit, and also a request made by the US to land two of its fighter jets at the Mattala Airport, as the government is trying to procure oil from Russia. Similarly, India is trying to secure its energy supply by coordinating with Iran so that its vessels carrying energy can have a safe passage through the Strait of Hormuz.

The attack on Iran demonstrated how irrelevant the multilateral organisations have become. It appears that the United Nations has lost its voice and become irrelevant in conflicts. South Asian countries have always underscored the importance of multilateral organisations in navigating geopolitical contestation among big powers and have argued for reforms to democratise these organisations. The attack on Iran also suggested that the big powers can go so far as to bypass such organisations and even manipulate them. While the UN criticised Iranian attack on Gulf countries, it remained silent on US-Israel attack on Iran. At the United Nations Human Rights Council (UNHRC) meeting on March 25, the Gulf countries stated that Iran poses an existential threat to their security.

The Iran war also shows that in times of war, the onus of security rests on one’s own country, and hardly any other country comes to one’s rescue. Perhaps the only alliance that has worked is the US partnership with Israel, as other US partners refused to get dragged into this war. The economic stakes of the war very high. Most South Asian countries fear that if the war continues for a long time, it will drive inflation even more, hitting their economies.