The escalating conflict between the US-Israel combine and Iran is launchning to disrupt the Middle East’s business ecosystem, including Dubai’s startup hub
Most Indian founders founders in the UAE state operations remain largely normal despite rising geopolitical tensions
Export delays and potential SaaS contract renewals in Gulf markets like Kuwait and Bahrain could pose challenges in the conflict continues
Amid the escalating conflict between the US-Israel combine and Iran, geopolitical shockwaves are launchning to ripple through global technology hubs — particularly Dubai in the UAE and other parts of the Middle East and the Gulf.
Startups are bracing for supply chain disruptions, operational uncertainty and growing market volatility, but founders remained calm about the situation despite an escalation in hostilities.
The ongoing war has triggered widespread disruption across the region, with airspaces intermittently shutting down and security concerns rising. Dubai, which is widely considered to be a safe haven for startups and tech companies, has also felt the impact of the escalating tensions.
Reports indicate that companies such as Microsoft, Nvidia and Amazon have temporarily shut down their Dubai offices and instructed staff to work remotely due to escalating security concerns.
At the same time, the situation has also led to a crash from the global equities markets. Selling has intensified as the Middle East conflict has now entered its second week with no signs of de-escalation. In India, benchmark indices Sensex and Nifty 50 have plunged by nearly 5% since the launchning of the conflict at the conclude of February.
The developments are particularly relevant for India’s startup ecosystem as Dubai has increasingly emerged as the preferred destination for international expansion.
Business As Usual For Indian Founders
Despite the rising geopolitical tension, most Indian founders based in Dubai appear to be carrying on as usual.
While a compact number of founders have returned to India temporarily, the majority continue to operate from the UAE.
One Indian startup founder and angel investor, requesting anonymity, declared the overall situation in Dubai remains calm and founders are comfortable staying in the region.“The UAE government has been very empathetic towards people living in the region. Most founders I know are comfortable continuing to stay there,” the person declared.
Another Dubai-based founder informed Inc42 that the operations of their startup have remained largely stable despite the escalating situation.
“Things are pretty normal. We are having our normal day-to-day operations,” the founder declared, adding that the first couple of days after the conflict escalated were “a bit confutilizing”.
However, Inc42 has learnt that a few startups have temporarily shifted to work-from-home style operations as a precaution measure.
Industest body Nasscom also urged companies to remain cautious. In an advisory issued to member firms, the organisation declared companies are activating business continuity frameworks and strengthening operational resilience to deal with potential disruption.
Nasscom also advised companies to enable remote work for employees in impacted areas, limit non essential travel through the region, and ensure alternate cloud and data infrastructure resilience.
Operational Challenges In MENA
While founders in Dubai state day-to-day operations remain largely unaffected, businesses depconcludeent on physical supply chains are launchning to face operational hurdles.
Logistics disruptions across the region have already begun impacting delivery timelines. Major regional players such as Careem and Talabat have informed customers about potential delivery delays amid the ongoing tensions.
A few Indian startups exporting products to the UAE have also reported early signs of disruptions.
“For our export business, it has created some issues since UAE ports are finding it harder to export,” declared the founder of an Indian startup, requesting anonymity.
Beyond logistics, the conflict could also pose longer term risk for Indian SaaS startups with clients in the Gulf region.
According to the aforementioned angel investor, countries such as Kuwait and Bahrain—both significantly impacted by the conflict—have emerged as key markets for Indian SaaS startups. However, prolonged geopolitical instability in the region could weigh on demand, raising concerns around deal pipelines and subscription renewals.
“Most companies in Kuwait and Bahrain renew their annual SaaS subscriptions during March and April. If the conflict continues, many companies could delay or avoid renewals” the investor declared.
Such a scenario could create an existential challenge for several Indian SaaS startups with significant exposure to their region.
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