On February 28, the U.S. and Israel launched military strikes on Iran, which continue to date. Among those targeted in the strikes was Iran’s Supreme Leader Ayatollah Ali Khamenei and much of Iran’s political and military leadership. The U.S. has claimed to have devastated Iran’s nuclear and military infrastructure, and will continue airstrikes to dismantle its missile capabilities.

The attack’s aftershocks were felt almost immediately across South Asia — on the streets and in mosques, as thousands came out in protest against Khamanei’s assassination. Khamenei, a Shia leader, commands respect among many across the Shia-Sunni divide due to his pro-Palestinian and anti-imperialist stance.

Importantly, the U.S.-Israel war on Iran has shaken central bank reserve calculations, freight insurance desks, and the mobile wallets of millions of South Asian migrant workers in the Gulf.

The war in Iran is not South Asia’s war. But three interlocking vulnerabilities — sectarian identity politics, energy import dependency, and remittance-driven economies underscore that the region cannot be a mere spectator. What is unfolding now is a stress test for South Asia’s social cohesion, economic resilience, and diplomatic independence, all simultaneously.

The conventional expectation, shaped by decades of Saudi-Iranian proxy competition and the bloody sectarian violence it spawned across Pakistan and Afghanistan, was that an assault on Iran, the nerve center of global Shia identity, would deepen the Shia-Sunni fault line in South Asia. What has happened instead is more complicated, and in some ways more instructive.

The most striking example comes from Bangladesh — a country that is over 90 percent Sunni, which has no significant Shia population to speak of. On March 1, the Bangladesh Jamaat-e-Islami, the country’s principal Islamist party and a quintessentially Sunni organization, staged a mass rally at Baitul Mukarram National Mosque in Dhaka to condemn what its leaders called a “heinous attack” on Iran. Jamaat Nayeb-e-Ameer ATM Azharul Islam declared that the assault on Iran “is not only against Iran and the Muslim world; it is against democracy, humanity and human rights.”

In India, the picture was equally striking. Marches and demonstrations mourning Khamenei were held across more than a dozen states and union territories from Bihar and Uttar Pradesh to Tamil Nadu and Karnataka. In Jammu and Kashmir, Sunni leader Mirwaiz Umar Farooq condemned the killing of Khamenei and said that he stood in “solidarity against this killing.”  In Jharkhand, representatives of the Jharkhand Janadhikar Mahasabha, the Communist Party of India (Marxist-Leninist) Liberation, the Communist Party of India-Marxist and the Communist Party of India held a protest describing the U.S.-Israeli attacks on Iran as “criminal and violent.” The Indian National Congress also “unequivocally condemns the targeted assassination” of the Iranian leader. This was not sectarian Shia politics; it was a cross-ideological anti-imperialist coalition.

What explains this? Samuel Huntington’s “clash of civilizations” thesis offers one lens, however imperfect. When the perceived aggressor is a U.S.-Israeli military coalition, Muslim identity — Sunni and Shia alike — can coalesce against a common external adversary. The war has, at least temporarily, reconfigured the axis of conflict in South Asian Muslim political consciousness: not Shia vs. Sunni, but Islam vs. Western military unilateralism.

Yet this solidarity has a brittle underside. The Pakistan case is a bit different. Pakistan is home to 15-20 percent Shia — over 35 million people — for whom Iran is a spiritual heartland, with thousands making annual pilgrimages to Iranian shrines. For Shias, Khamenei was not simply a political figure; he was part of their belief system, a “religious and spiritual guide.”

The sectarian conflict between Shia and Sunni has been well evident even in the recent past in Pakistan. In February 2026, the Islamic State of Khorasan Province struck a Shia mosque in Islamabad, killing 36 worshippers.

After Khamenei’s killing, Pakistan also witnessed violent protests, with security forces’ response leaving 20 demonstrators dead.

And in the longer shadow of the conflict, echoes of the Baloch Liberation Army-Azaad’s charter for a “Greater Balochistan,” presented in the wake of the Iran-Israel war of June 2025, signal that ethno-separatist entrepreneurs are already positioning themselves to exploit the vacuum.

A natural question then arises: while Shias in Bangladesh and India often express solidarity, why is the situation somewhat different in Pakistan? The answer lies in Pakistan’s long history of sectarian conflict and its geographical proximity to Iran. In India, the Muslim community itself is a minority, with approximately 20 million Shias — representing 10-15 percent of the total Muslim population — facing structural barriers to wider influence. In Bangladesh, the Shia population is even smaller, around 2 million or just 1-2 percent, leaving them largely on the margins.

South Asia’s energy security is likely to be affected too. Tanker operators suspended transport of crude, following the Islamic Revolutionary Guards Corps’ warning that no ship is permitted to pass the Strait of Hormuz. By March 2, Brent crude had surged to around $82 per barrel, a seven-month high. The numbers tell a story far larger than oil markets. Roughly 20 million barrels of crude oil moved through Hormuz each day in 2024; close to 27 percent of all global maritime petroleum trade passed through the strait in the first quarter of 2025. The three-kilometer-wide shipping lane between Oman and Iran is the world’s most consequential chokepoint — and Iran has now transformed it from a vulnerability into a weapon.

For South Asia, the arithmetic is brutal. India sources nearly half of its oil imports and over two-thirds of its LNG imports from the Gulf — virtually all of it moving through Hormuz. Bangladesh, a net hydrocarbon importer with negligible domestic reserves, imported crude oil and refined petroleum products worth approximately $4.1 billion in the first nine months of FY2024-25. Energy expert Dr. Ijaz Hossain has described Hormuz as a lifeline for Bangladesh’s energy supply: if Brent reaches $100 per barrel, the pressure on Bangladesh’s current account would be severe, threatening a balance-of-payments crisis for an economy already wrestling with double-digit inflation and a depreciated taka — and with gross forex reserves of only around $33–35 billion offering limited buffer. Pakistan faces its own exposure — and at a moment when it is simultaneously fighting the Tehreek-e-Taliban Pakistan along its Afghan border, the fiscal space to absorb an oil shock is minimal.

For countries like Bangladesh, Pakistan, and India, where gas-fired power generation has grown rapidly, a prolonged closure could mean electricity shortages feeding directly into industrial output and household costs. For European wholesale gas prices alone, a full three-month closure could see them triple to $100 per megawatt hour. Ali Vaez of the International Crisis Group has warned that prices would not merely spike but “gap violently upward on fear alone,” with reverberations through inflation and the fiscal positions of fragile economies within weeks. The war’s energy impact on South Asia is not a secondary consequence — it is a primary front.

Underlying South Asia’s exposure is a structural dependency that the conflict has made visible: the remittance lifeline from the Gulf. India alone has nearly 10 million citizens working in Gulf countries; Pakistan and Bangladesh each have over 5 million. India received over $135 billion in remittances in 2024, with more than a third originating in the Gulf. Bangladesh earned approximately $27 billion in remittances in the same year, overwhelmingly from workers in Saudi Arabia, the UAE, Qatar, Kuwait, and Oman. For both economies, this income stream is not discretionary — it funds household consumption, smooths current account deficits, and provides the foreign exchange reserves that central banks deploy to manage exchange rates and import financing.

The war has already disrupted Gulf aviation and generated a climate of instability in a region that hosts these workers. Iran’s retaliatory missile strikes damaged infrastructure in Bahrain, Qatar, and the UAE — including Dubai’s airport and the Burj Al Arab hotel. Air India, Biman Bangladesh Airlines, IndiGo, and other South Asian carriers suspended Gulf services.

If the conflict escalates further, triggering Gulf labor market disruptions, worker evacuations, or prolonged economic damage to host economies, the remittance pipeline could contract sharply. For Bangladesh, remittances are the primary buffer against the reserve depletion that threatens the taka’s stability. The garment sector, which generates 80 percent of export earnings, faces additional exposure through rising freight costs and insurance premiums as underwriters reprice Gulf transit risk.

Pakistan’s position is doubly fraught. Its $3 billion annual trade with Iran, which is conducted largely through barter and local currency arrangements, faces disruption. The border economies of Balochistan — already absorbing the reverberations of the Pakistan-Afghan frontier conflict — are more commercially integrated with Iran than with the Pakistani heartland. Instability in Iran’s Sistan-Balochistan province could simultaneously destabilize Pakistan’s most restive province, divert security resources, and destroy the informal trade networks on which border communities depend. ISKP, al-Qaida, and TTP are already seeking to expand their footprints in Balochistan, and Iranian instability risks handing them a boost.

The Iran war has confronted South Asia with a convergence of crises it is structurally ill-equipped to absorb: a sectarian identity shock that could tip either toward solidarity or violence, an energy price spiral that threatens fiscal balances already under stress, and a remittance disruption that could strip the macroeconomic buffers holding several economies upright. The question for governments in Dhaka, Islamabad, and New Delhi is whether they can navigate all three simultaneously — with diplomatic independence, economic contingency planning, and the honesty to tell their populations the truth about what is at risk. History suggests that it is a great deal to ask.