The Hormuz crisis appears to be winding down, but India will have to prepare for another one that may be even bigger.

Till a few months ago, the chances of a crisis in the Strait of Hormuz looked almost negligible. The Hormuz closure was war-gamed by experts, but it did not seem that Tehran would actually go down that path.

There were two factors behind this reasoning. First, Iran had never, in its history, closed Hormuz. Second, it too relied on the strait to export its own oil, a lifeline for Tehran.

Pushed to the wall by Israeli and US strikes and elimination of top leaders, Tehran threatened to blow up any ships crossing the Hormuz. The strait was effectively shut, and it worked for Iran.

The Hormuz closure created the "largest supply disruption in the history of the global oil market," according to the International Energy Agency (IEA). 

About 25 per cent of the world's seaborne oil passed through Hormuz in 2025. At one point, 55 per cent of India's total imports came through Hormuz. This figure stands at 90 per cent for CNG.

The shutdown of Hormuz pushed oil over $100 a barrel, creating anxiety not only in Asia - which relies heavily on supply through the strait - but also in Europe and the US. Fearing serious economic impact, Washington softened the blow - and preferred to negotiate a deal with Iran.

US President Donald Trump has announced the deal would be signed on Friday, June 19.

Don't Miss: China's two red lines: When Beijing may again escalate tensions with India

'Taiwan crisis will be bigger than Hormuz'

Once Hormuz is reopened, it is natural to think that the worst is behind us. But India's vulnerabilities do not end in West Asia.

If you are done with Hormuz, turn your gaze to the East - the Taiwan Strait. And if you think that's too far and won't bother us - think again.

The impact of the Hormuz shutdown is a fraction of what could happen once the crisis erupts in the Taiwan Strait.

"We seem to think that Taiwan is not our concern because it's 5,000 kilometers away. Let me tell you that we are grossly underestimating the impact of a crisis in the Taiwan Strait on our country," says Vijay Gokhale, former Foreign Secretary, during a discussion with ThePrint on his new book, China's War.

He says he is not talking about war because if that happens, then it would be World War III. "Because the United States will be involved." He warns that if the Hormuz playbook - which involves blockade, missile, and cyber attack - is applied in the Taiwan Strait, the trade in the Malacca Strait will immediately stop. And India will be heavily impacted.    

The Malacca Strait is a narrow stretch of water between the Malay Peninsula and the Indonesian island of Sumatra. It connects the Andaman Sea to the South China Sea, making it one of the world's most important maritime chokepoints. A large share of oil and gas imports for countries such as China, Japan, and South Korea transit through it. More than 80,000 ships use the strait annually.

'India's 40% of trade goes through Malacca'

"Forty per cent of India's trade goes through the Malacca Strait. So, any Indian exporter exporting through the Malacca Strait is going to take a hit. Supply chains will collapse because 30% of all global supply chains originate in China. And that means not only the Indian exporter but the Indian importer importing from China is going to suffer," Gokhale points out.  

The crisis will not be limited to exporters sending goods to the East; those exporting to the West will also be hit. "All supply chains globally will be disrupted. And therefore, the West won't purchase your stuff even if you're not exporting east of the Malacca Strait. So you're going to have a problem with that," the former secretary says.  

Even worse, he continues, 90% of all (advanced) semiconductors come from that region - Taiwan, Japan, Korea, and China. "You are a heavily service-dependent economy. Your e-commerce will collapse. Your e-logistics will collapse. Your entertainment industry will collapse. Your education industry will collapse. The unemployment implications will be massive and socially destabilising for this country. You won't be able to order pizza. You will not be able to buy a car."

'IT-enabled services will be crippled'

The crisis in the Taiwan Strait will also cripple India's IT industry, warns Gokhale, who has also served as Ambassador to China from January 2016 to October 2017.

The former ambassador further states that 15 submarine cables from India to Silicon Valley are anchored in Taiwan. And in the last two years, he adds, China has cut three cables and demonstrated its capacity to do so.

"Your IT-enabled services will be crippled. The impact on India's economy will be massive. We have done no study in this regard. We do not understand the implications of this. We are totally unprepared for a crisis in the Taiwan Strait."

"We should not think Taiwan is too far or that it's not my problem if China invades Taiwan. It is one hell of a problem for us," the former diplomat warns.

Taiwan Strait crisis - inevitable? 

China has been preparing, for years, to take control of Taiwan.

In 2023, former CIA Director William Burns said US intelligence believed Xi Jinping had instructed the People's Liberation Army to be ready by 2027 to conduct a successful invasion of Taiwan.  

And if that happens, a crisis will erupt in the Taiwan Strait.

In March this year, the US intelligence agencies concluded that Beijing does not currently plan to invade Taiwan in 2027. "China, despite its threat to use force to compel unification if necessary and to counter what it sees as a US attempt to use Taiwan to undermine China's rise, prefers to achieve unification without the use of force, if possible," the US intel agencies said in the 2026 Annual Threat Assessment.

However, the same report also acknowledges: "China has never abandoned the use of force against Taiwan."

In his book Prisoners of Geography, British author Tim Marshall argues that there is a weakness in Western thinking when it comes to geopolitics and the threat of war. "Too many policymakers overestimate logic and underestimate emotion."

For Xi Jinping, Taiwan is not just a piece of land - it is an emotion.