Union Finance Minister Nirmala Sitharaman has underscored the government’s vigilance over the ongoing crisis in West Asia and its potential ramifications on India’s economy, with a particular focus on fuel, fertilisers, and foreign exchange reserves. During an event commemorating the anniversary of the Small Industries Development Bank of India, Sitharaman pointed out that the rising crude oil and fertiliser prices are significant concerns. She remarked that fertiliser costs have surged to unprecedented levels, and the escalating gold prices are adding pressure on the economic front.
Despite these external challenges, Sitharaman reassured that India’s economic fundamentals remain robust. She cautioned against creating panic, emphasizing that the country must steer clear of “fearmongering” in the face of global uncertainties. The finance minister noted that the current economic strains are largely driven by external factors and stressed the importance of maintaining public confidence through prudent policies and clear communication.
In a bid to alleviate pressure on consumers, the government recently reduced excise duty on petrol and diesel, a move Sitharaman acknowledged would result in a revenue loss of nearly ₹1 lakh crore. Additionally, she expressed concerns over delayed payments to micro, small, and medium enterprises (MSMEs), highlighting that approximately ₹8.1 lakh crore remains pending in dues. She called on public sector companies to adhere to the mandated 45-day period for clearing these payments.
The escalation of tensions near the Strait of Hormuz, a crucial global shipping lane, has also sparked worries about potential disruptions to the import of petroleum products and fertilisers. In recent weeks, fuel prices have surged significantly, with state-owned oil companies raising petrol and diesel prices once again on Monday. Since mid-May, the prices have increased by more than ₹7 per litre.
Prime Minister Narendra Modi had previously advised citizens to exercise caution in their spending habits and refrain from unnecessary purchases amid the growing global economic uncertainty linked to the West Asia conflict. This advisory underscores the government’s focus on ensuring economic stability during these challenging times.