NEW DELHI: After leading the BJP to a landslide win in the Lok Sabha elections, Prime Minister Narendra Modi will have to deftly navigate a trade war between the United States and China and rising tensions between the US and Iran, an important source of cheap oil for India's fast-growing economy.

India imports over 80 per cent of its crude oil requirements and has stopped buying from Venezuela and Iran under US pressure.

New Delhi previously got sanctions waivers from Washington to buy Iranian oil, but these expired on May 1. This has pushed India to source oil from elsewhere, including from Saudi Arabia, pushing refiners to spend more in dollar terms.

Any oil price spike, for example on the back of tensions in the Middle East, could push up fuel prices and therefore inflation, which has long dogged the Indian economy.

"We would not like to see a move towards any escalation in any way ... for the simple reason that we depend very heavily on stability in that part of the world," India's ambassador to the US Harsh Vardhan Shringla said on Thursday.

The fear of a further conflagration in the Gulf region could also threaten the security of 7 million Indians working as migrant laborers. "It's an extremely difficult and challenging position for India," said Dilip Sinha, a retired Indian diplomat.

At the same time, global leaders are also looking to India to take on a larger burden of responsibility in the world, acting as a security buffer in the Indo-Pacific, opening its markets and responding to climate change

The US wants India to act as a counterweight to Beijing to prevent the rise of Chinese hegemony in Asia, but it also wants the Modi government to lower barriers to trade.

US commerce secretary Wilbur Ross complained to leaders in New Delhi earlier this month that American companies struggle to access India's markets because of tariffs and myriad regulations. To help reduce the trade imbalance, India has signed more than $15 billion in US defence contracts.

According to the World Economic Forum, India is poised to become the world's third-largest consumer market, growing from $1.5 trillion this year to $6 trillion by 2030.

During the Cold War, India didn't have open relations with Israel, leaning heavily in favor of the Palestinians. But over the last 25 years, ties between the two countries have warmed.

Trade between them has skyrocketed from $200 million in 1992, when India and Israel established diplomatic ties, to $4.16 billion in 2016. The growing ties risk upsetting India's longstanding relationship with other Middle Eastern countries.

The US weapons purchase agreements, coupled with Russia's improving ties with Pakistan and China, also pose a challenge to Russia-India relations, which date back to the Cold War.

"India's Russian ties are also beginning to fray. The recent fighter aircraft deals with France and other military hardware purchases from the USA have resulted in sidelining India's usual defense partner," the opposition Indian National Congress party said in a statement.

India also faces a big challenge with China at its northeastern border, as Beijing invests billions in infrastructure development in South Asia.

India takes years to execute projects, whereas China delivers what it promises quickly. India needs to maintain close ties with Sri Lanka, Bangladesh, Bhutan, Nepal and the Maldives, its traditional sphere of influence. But delays by Indian companies have led to cost overruns, prompting India's neighbors to look toward China for speedy development.

Modi has carefully cultivated ties with President Xi after a 2017 border standoff over Chinese construction of a road in Doklam near a tri-border area with Bhutan. India and China fought a bloody war in 1962 over a border dispute that continues to simmer.

But their relations have thawed recently, with Beijing deciding against blocking the UN designation of Masood Azhar, the leader of Pakistan-based terror group JeM that claimed responsibility for the February suicide bombing in Kashmir's Pulwama, as a global terrorist.

