India is closely monitoring the economic repercussions of the ongoing crisis in West Asia, focusing particularly on its effects on fuel, fertilisers, and foreign exchange reserves, according to Union Finance Minister Nirmala Sitharaman. During a recent event celebrating the anniversary of the Small Industries Development Bank of India, Sitharaman expressed concerns over escalating crude oil prices and fertiliser costs, which she identified as significant challenges. She pointed out that the spike in fertiliser prices is particularly alarming, while rising gold prices are also adding pressure to the economy.
Despite these external pressures, Sitharaman assured that India’s economic fundamentals remain robust. She cautioned against “fearmongering” and insisted that maintaining public confidence is crucial amidst global instability. Emphasizing responsible policymaking and communication, she asserted that most current economic challenges are driven by factors outside the country. To alleviate consumer burden, the government recently reduced excise duty on petrol and diesel, a decision that is expected to result in a revenue loss of nearly ₹1 lakh crore.
The Finance Minister also addressed issues concerning micro, small, and medium enterprises (MSMEs), highlighting that approximately ₹8.1 lakh crore are entangled in delayed payments. She called upon public sector companies to settle these payments within the mandated 45-day timeframe. Furthermore, India is facing potential disruptions in the import of petroleum products and fertilisers due to tensions surrounding the Strait of Hormuz, a vital global maritime route.
Fuel prices have surged in recent weeks, with state-run oil companies implementing further increases in petrol and diesel prices on Monday. Since mid-May, the cost of both fuels has risen by more than ₹7 per litre. In light of these developments and the broader economic uncertainty sparked by the West Asia conflict, Prime Minister Narendra Modi has previously advised citizens to exercise caution in their spending and refrain from unnecessary purchases.