The Indian government is keeping a vigilant eye on the economic ramifications of the ongoing West Asia crisis, with a particular focus on the implications for fuel, fertilisers, and foreign exchange reserves, according to Union Finance Minister Nirmala Sitharaman. Addressing a gathering at the Small Industries Development Bank of India anniversary event, Sitharaman highlighted the challenges posed by rising crude oil and fertiliser prices, which have become significant concerns for the Indian economy. She also pointed out the pressure exerted by increasing gold prices.
Despite these external challenges, Sitharaman reassured that India’s economic fundamentals are robust. She cautioned against panic and stressed that the nation cannot succumb to “fearmongering” amidst global uncertainties. The finance minister emphasized that the current economic pressures predominantly stem from external factors, urging the need for public confidence through prudent policies and clear communication. Highlighting a recent governmental measure, she noted the reduction in excise duty on petrol and diesel, a move expected to result in a revenue loss of nearly ₹1 lakh crore, aimed at alleviating consumer burden.
Sitharaman also expressed concern over the backlog of payments owed to micro, small, and medium enterprises (MSMEs), revealing that approximately ₹8.1 lakh crore is pending in dues. She called on public sector companies to adhere to the mandated 45-day period for clearing MSME payments. With tensions arising around the Strait of Hormuz—a crucial shipping lane—India is particularly wary of disruptions to imports of petroleum products and fertilisers.
In recent weeks, fuel prices have surged, with state-run oil companies further increasing petrol and diesel rates on Monday. Since mid-May, prices have climbed by more than ₹7 per litre. Amidst the growing economic uncertainties tied to the West Asia conflict, Prime Minister Narendra Modi has urged citizens to exercise caution in their spending and avoid unnecessary purchases.