By TBN Editorial Staff April 29, 2026

For decades, the economic heartbeat of South Asia has been inextricably linked to the pulse of the Persian Gulf. From the crude oil that fuels its growing industries to the billions in remittances that prop up its foreign exchange reserves, the region has long been the primary beneficiary of Gulf stability.

Key Points

• Regional markets split: AI-driven optimism has propelled Taiwan, South Korea, and Japan to record highs. India, however, has struggled to keep pace, weighed down by the absence of strong AI-linked stocks.
• Exporters under strain: Indian exporters face mounting crude-linked input costs. While Western buyers resist price hikes, new contracts are expected to carry increases of 15–30%, raising concerns over client retention.
• Corporate pressures: Reliance Industries reported an 8% year-on-year profit decline in its oil and gas units. Chairman Mukesh Ambani cited “unprecedented dislocation in global supply chains” as a key factor.
• Capital flows disrupted: Indian venture capital firms, traditionally reliant on Middle Eastern funding, are seeing negotiations slow. Many are now turning to Europe and Asia to secure new investment.

Now, as the war between the U.S.-Israeli coalition and Iran enters its third month, that dependence has turned into a systemic vulnerability. With the Strait of Hormuz effectively “functionally impaired” and regional output losses estimated by the UNDP to reach as high as $299 billion, South Asia is facing its most severe economic shock since the 1970s energy crisis.

The Energy Blockade: A Continent Paralyzed

The closure of the Strait of Hormuz on March 4, 2026, sent shockwaves through energy markets that South Asian capitals were unprepared to absorb. With roughly 80% of the region’s oil and LNG imports typically transiting this narrow chokepoint, the impact was instantaneous.

In Bangladesh, which relies on imports for 95% of its energy needs, the government has been forced into “survival mode.” Fuel caps and the closure of universities have become the new norm. In India, the government has invoked emergency powers to redirect LNG supplies from industrial users to households, while IT giants like Cognizant and HCLTech have reverted to full work-from-home policies to mitigate the “cafeteria crisis” caused by fuel shortages.

Brent Crude, which surged past $120 per barrel in mid-March, has settled into a volatile range of $105-$110, but for South Asia, the price tag is only half the problem. The physical absence of supply has led to record-high electricity costs and a “grocery supply emergency” as transport fleets sit idle.

The Remittance Rupture: A Human and Fiscal Toll

Perhaps more devastating than the energy crisis is the potential collapse of the labor export model. There are an estimated 6 million Pakistanis and over 5 million Bangladeshis working in the Gulf. As the war intensifies, these workers are no longer just economic assets; they are a massive humanitarian and fiscal liability.

“We are seeing a wave of voluntary and forced returns as contracts are prematurely terminated in sectors like hospitality and domestic work,” says Dr. Shujaat Faruq, Professor of Economics at the Pakistan Institute of Development Economics.

The World Bank projects that South Asian growth will slow to 6.3% in 2026, down from 7% in 2025. This downward revision is driven largely by the expected dip in remittances, which serve as the primary hedge against balance-of-payment crises for nations like Nepal and Sri Lanka.

From Fields to Factories: The Fertilizer Squeeze

The ripple effects have now reached the soil. The Gulf region produces over 30% of the world’s urea, a critical fertilizer for South Asia’s agrarian economies. With production halted at major complexes like Qatar’s Ras Laffan—following Iranian strikes on March 18—fertilizer prices have jumped 31%.

This creates a “toxic confluence” for farmers in India and Pakistan ahead of the next planting cycle. Rising input costs, combined with a 140% surge in LNG spot prices, are making basic food production prohibitively expensive. In some Indian markets, agricultural exports like bananas and rice have stalled due to shipping disruptions, forcing farmers to dump produce locally at a loss while urban consumers face soaring prices.

The Emergence of the “War Economy”

South Asian governments are responding with a mix of desperation and radical innovation.

• The Four-Day Week: Pakistan and Sri Lanka have officially introduced shortened workweeks to curb fuel consumption.
• Energy Transition: Analysts suggest the crisis is providing an unintended boost to the renewable sector. In India, IT firms are switching to solar-powered kitchens and electric vehicle fleets to bypass the kerosene-based fuel shortages.
• Trade Rerouting: With the Red Sea and Suez Canal routes increasingly hazardous due to Houthi involvement, shipping is being diverted around the Cape of Good Hope, adding 15–20 days to transit times and tripling insurance premiums.

The Long Shadow

The UNDP warns that the conflict could push an additional 8.8 million people in South Asia into poverty by the end of the year. While a temporary ceasefire was announced on April 8, maritime traffic remains at 20% of pre-war levels.

For the economies of South Asia, the “narrative of a safe Gulf” has been irreversibly shaken. The lesson of 2026 is clear: when the Middle East catches fire, South Asia feels the burn more intensely than perhaps any other region on earth. The challenge now is not just weathering the current storm, but rebuilding a regional economy that is no longer one blockade away from collapse.

The Iran war is reshaping South Asia’s economic landscape—boosting some East Asian markets, squeezing India’s exporters and conglomerates, redirecting capital flows, and worsening Pakistan’s fuel costs.

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Capital expenditure rose 49% to $31.9 billion in the company’s fiscal third quarter, the company said on Wednesday, compared with Wall Street expectations of $34.90 billion, according to Visible Alpha. Spending had ‌totaled $37.5 billion in ⁠the second ⁠quarter.

The results could ease fears that sluggish adoption of its Copilot 365 assistant for businesses and a heavy reliance on OpenAI may have chipped away Microsoft’s early lead in the AI race.

It may also help justify data-center ⁠spending that ‌has strained cash flows, with major cloud players on track to spend more than $600 billion on AI infrastructure this year.

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To sharpen its competitive ⁠edge, Microsoft has aggressively added Anthropic’s technology to its cloud service and products like Copilot amid rising demand for the Claude creator’s models. The expanded AI model options helped the company land on Monday its biggest-ever roll-out of Copilot, covering roughly 743,000 Accenture employees – a majority of the IT firm’s workforce.
Earlier this week, Microsoft also overhauled its OpenAI deal to lock in its 20% cut of the startup’s revenue through 2030 regardless of whether it ‌achieves technological breakthroughs.
But the new arrangement also strips Microsoft of exclusive rights to resell OpenAI’s products on its cloud, just as competition heats up from Alphabet and Amazon.

The e-commerce ⁠giant has already started offering OpenAI’s latest models and Codex coding tool on its cloud.

The move could free up cloud capacity for Microsoft, which has blamed shortages for holding back revenue growth and used that to argue for its massive spending.

Funding those outlays has, however, forced companies to look for ways to cut costs. Microsoft earlier this month rolled out its first employee buyout program in more than five decades.

Amazon and Meta have also announced job cuts affecting thousands of employees.

Operator

Good evening, and welcome to Universal Music Group’s First Quarter Earnings Call for the period ended March 31, 2026. My name is Gavin and I will be your conference operator today. Your speakers for today’s call will be Sir Lucian Grainge, Chairman and CEO of Universal Music Group; and Matt Ellis, Chief Financial Officer. They will be joined during Q&A by Michael Nash, Chief Digital Officer; and Boyd Muir, Chief Operating Officer. [Operator Instructions]

As a reminder, this call is being recorded. Please also let me remind you that management’s commentary and responses to questions on today’s call may include forward-looking statements, which, by their nature, are uncertain and outside of the company’s control. Although these forward-looking statements are based on management’s current expectations and beliefs, actual results may vary in a material way.

For a discussion of some of the factors that could cause actual results to differ from expected results, please see the Risk Factors section of UMG’s 2025 annual report, which is available on the Investor Relations page of UMG’s website at universalmusic.com. Management’s commentary will also refer to non-IFRS measures on today’s call. Reconciliations are available in the press release on the Investor Relations page of UMG’s website.

Thank you. Sir Lucian, you may begin your conference.

Shares of the company were up about 4% in extended trading.

Alphabet’s total revenue rose 22% to $109.9 billion in the first quarter, compared with an estimate of $107.2 billion, according to LSEG data.

Revenue at Google Cloud grew 63% to $20 billion in the first quarter ended March, compared with analysts’ ‌average estimate ⁠of a ⁠50.1% increase, according to data compiled by LSEG.

The cloud unit’s backlog nearly doubled quarter on quarter to over $460 billion, the company said.

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The third-largest cloud services provider globally, behind Amazon Web Services and Microsoft’s Azure, has continued to land major deals, including expanded AI infrastructure partnerships with Meta and cybersecurity firm Palo Alto Networks.
The results underscore Alphabet’s position as a key beneficiary of a global surge in spending on artificial intelligence, even as investors remain watchful of whether massive outlays ⁠on infrastructure ‌will translate into sustained growth and market share gains. Strong demand for cloud-based AI services continues to outstrip supply across the industry, pushing hyperscalers to accelerate investments in ⁠data centers, advanced chips and networking equipment.

Alphabet, Microsoft, Amazon and Meta are expected to collectively spend well over $600 billion this year to expand AI capacity, as competition intensifies and companies race to secure computing power.

Google Cloud’s performance comes at a time when rivals have delivered mixed signals on growth, helping ease concerns about potential market share losses for Alphabet in the highly competitive cloud market.

At the same time, capacity constraints remain a bottleneck across the sector, limiting providers’ ability to fully capitalize on AI-driven demand ‌despite aggressive spending plans.

Alphabet has also gained traction in its in-house AI efforts. Its Gemini models, including newer iterations rolled out this year, have seen rising adoption across enterprise and consumer applications, strengthening ⁠the company’s position in the AI race.

A partnership to power Apple’s artificial intelligence features, including upgrades to Siri, is expected to significantly expand Google’s reach across a vast global device base.

Alphabet shares have outperformed most Big Tech peers over the past year, supported by growing signs that AI integration is lifting its core search and advertising businesses.

AI-driven features such as AI Overviews and AI Mode continue to boost user engagement, while opening new avenues for monetization. The company has expanded ads within AI-generated responses across multiple markets and said monetization is broadly in line with traditional search.

A United Airlines pilot reported a potential collision with a drone Wednesday morning while approaching its destination at San Diego International Airport, according to a flight audio recording.

The flight, a Boeing 737 that departed from San Francisco, reportedly struck the object at an altitude of roughly 3,000 to 4,000 feet — well above the elevation typically permitted for drones under federal regulations. 

“We hit a drone at around 3,000 feet,” the pilot said, according to a recording with air traffic controllers posted by ATC.com and shared on social media.

He added that the incident occurred as the plane was approaching landing.

WHAT A GOVERNMENT STAKE IN SPIRIT AIRLINES COULD MEAN FOR PASSENGERS AND THE INDUSTRY

A United Airlines passenger plane flies over the sky near San Francisco, California, United States, on October 7, 2022.  (Tayfun Coskun/Anadolu Agency via Getty Images)

The airline told FOX Business the plane did report a drone encounter, but the company could not confirm whether it struck the device.

“United flight 1980 reported a potential drone prior to arriving in San Diego,” the company said. 

“While approaching San Diego International Airport at about 4,000 feet altitude, the crew of United Airlines Flight 1980 told air traffic control they believed they saw a drone 1,000 feet below them,” the Federal Aviation Administration added in a statement to FOX Business.  

CHEVRON CEO WARNS AVIATION STRAIN COULD WORSEN AS JET FUEL CRUNCH DEEPENS

A drone is flying over the hills during sunset. (iStock)

According to the audio recording, the pilot described the object as a very small, red, shiny drone heading west.

The reported collision did not appear to affect the flight, which was carrying 48 passengers and six crew members, the company said.

United Airlines said the flight landed safely and passengers deplaned normally at the gate.

Maintenance crews also found no damage from the reported collision following a thorough inspection of the aircraft.

The FAA added that no other nearby pilots reported seeing a drone.

“Air traffic control alerted other pilots but did not receive any additional drone-sighting reports,” the agency said. 

A United Airlines plane takes off from San Francisco International Airport (SFO) in San Francisco, California, United States on March 23, 2026.  (Tayfun Coskun/Anadolu via Getty Images)

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Drone operations, especially near an airport, are strictly regulated by the FAA.

Depending on the location, drones operating without a waiver are prohibited from flying within several miles of an airport, with altitude limits that typically cap operations at just a few hundred feet.

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