India’s Finance Minister, Nirmala Sitharaman, affirmed that the government is vigilantly observing the repercussions of the ongoing West Asia crisis on the nation’s economy, particularly focusing on the sectors of fuel, fertilizers, and foreign exchange reserves. Speaking at an event commemorating the anniversary of the Small Industries Development Bank of India, she highlighted the significant concerns posed by escalating crude oil and fertilizer prices. Fertilizer costs, she pointed out, have surged to alarmingly high levels, and the increasing price of gold is adding further strain to the economic landscape.
Despite these external challenges, Sitharaman assured that India’s economic foundations remain robust and cautioned against inducing panic. She emphasized the importance of avoiding “fearmongering” during a time of global instability, suggesting that most of the current economic pressures are being driven by external factors. In her address, she underlined the necessity of maintaining public confidence through prudent policies and effective communication.
The Finance Minister also highlighted the government’s recent decision to reduce excise duty on petrol and diesel, a move expected to result in a revenue loss of approximately ₹1 lakh crore. Nonetheless, she deemed this measure essential to alleviate the financial burden on consumers. Additionally, Sitharaman expressed concerns over delayed payments to micro, small, and medium enterprises (MSMEs), noting that nearly ₹8.1 lakh crore is still pending in dues. She urged public sector enterprises to adhere to the mandated 45-day period for settling MSME payments.
Amidst these economic challenges, India is also grappling with potential disruptions in the import of petroleum products and fertilizers due to tensions surrounding the Strait of Hormuz, a critical global shipping route. The country has witnessed a sharp increase in fuel prices in recent weeks, with state-run oil companies raising petrol and diesel prices once again on Monday. Since mid-May, the price of both petrol and diesel has risen by over ₹7 per litre.
Previously, Prime Minister Narendra Modi had advised citizens to exercise caution in their spending and avoid unnecessary purchases, in light of the growing global economic uncertainty linked to the West Asia conflict. The collective efforts of the government aim to navigate these turbulent times while safeguarding the nation’s economic stability.