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India is prepared to take adequate steps to mitigate any impact of the Iran-Israel conflict on its economy and will "remain alert", Finance Minister Nirmala Sitharaman said on Thursday.

"Can't say that we are fully ready. As developments unfold, we are preparing to take adequate steps in India's interests," Sitharaman told the CNBC Awaaz news channel in an interview.

The conflict has not yet significantly impacted global oil prices. [O/R]

However, any escalation of tension in the oil-rich middle east could raise India's oil import bill. India is the world's third biggest oil importer, and ships in about 85% of its oil needs from overseas.

Sitharaman said India started importing oil from Russia to cushion the country from higher prices after sanctions were imposed by Western countries.

"Similarly in every challenge, we decide to take steps in India's interest after discussions with government departments. And definitely we will remain alert," she said.