Digital War Begins! Fake AI Videos trigger economic panic amid Israel-Iran war, experts warn
As tensions between Israel and Iran escalated in March 2026, a new risk has started to emerge for India. It is not just about oil or trade. It is also about misinformation powered by artificial intelligence. Experts say this mix is beginning to affect public behavior and market sentiment. The digital war that has begun after Israel-Iran war can trigger more serious complication for the economy.
Rise of Deepfake Diplomacy
In March 25, several AI-generated videos began circulating. These looked like real news alerts. They warned of fuel shortages due to tensions in the Strait of Hormuz. This triggered panic buying in Hyderabad and nearby areas. Long queues were seen at petrol pumps. Grocery stores also reported sudden bulk purchases. Authorities later stepped in and issued warnings against such misleading content.
Talking about this concerning issue Co-founder of AI& Beyond Jaspreet Bindra said ” hundreds of AI-generated war videos are flooding social media platforms, monetized by attention and amplified by algorithms.These videos, created using advanced AI tools, depict false scenarios such as Iranian missiles hitting Tel Aviv, the Burj Khalifa skyscraper in flames, and US troops being captured by Iranians. This disinformation can escalate tensions and manipulate public opinion.”
Real Impact Versus Artificial Panic
In the energy sector, social media rumors spoke about a complete fuel shutdown. In reality, prices have increased due to India’s dependence on crude imports.Experts believe the real danger lies in speed and scale. AI-generated misinformation spreads very fast. It shapes behaviour before facts can catch up. If this continues, it can deepen economic stress and weaken public trust. Managing the real crisis is one challenge. Managing the panic created by fake content may prove even harder.
Deepfake & AI Misinformation Incidents (India, March 2026)
Incident CategoryKey Details & Panic FactorVerification SourcePrime Minister DeepfakeA video appeared to show PM Narendra Modi at the NXT Summit calling Iran a “terrorist regime” and threatening both Iran and Pakistan.BOOM Live (March 13, 2026)Military PropagandaA deepfake of IAF Squadron Leader Ankita urged female pilots to join a “holy war” against Iran to avenge Israel.BOOM Live / ANI (Original traced to flight training clip)Diplomatic MisinfoFabricated footage of MEA Spokesperson Randhir Jaiswal claiming India would provide direct military support to Israel.MEA FactCheck / PIB (March 12, 2026)Financial ScamA deepfake of BSE CEO Sundararaman Ramamurthy offering “war-special” stock tips to exploit market volatility.The Hindu / BSE Official (Jan-March 2026)Media ImpersonationA fake news bulletin featuring Palki Sharma claimed India leaked sensitive intelligence to Mossad about Iranian assets.Firstpost / BOOM Live (March 10, 2026)Defense MinistryA manipulated video of Rajnath Singh falsely claiming he endorsed Israel’s strikes on Iranian soil.PIB Fact Check (March 12, 2026)Army CoordinationClaims that Army Chief Gen Upendra Dwivedi admitted to sharing coordinates of Iranian ships with the Israeli Navy.PIB / Deepfakes Analysis Unit (DAU)
Market Manipulation
Around Rs 1 lakh crore were lost due to sell-off from the share market in March. Experts believe that fake news and AI-generated videos can cause sudden changes in market sentiment, leading to falling of stocks, price fluctuations and potential losses for investors. CTO and Innovation Officer of global AI Company Mastek Ritwik Batabyal underlined ” The economic repercussions of the fake AI-generated videos in the Israel-Iran conflict are significant, with the potential to trigger market volatility and manipulate public sentiments.”
