Union Finance Minister Nirmala Sitharaman has assured that the Indian government is keeping a vigilant eye on the economic impact of the ongoing crisis in West Asia, particularly concerning fuel, fertilisers, and the nation’s foreign exchange reserves. Addressing an event commemorating the anniversary of the Small Industries Development Bank of India, Sitharaman expressed concerns over the surge in crude oil and fertiliser prices, which have reached unprecedented heights. The increase in gold prices is also exerting additional pressure on the economy.
Despite these external challenges, Sitharaman reaffirmed the resilience of India’s economic fundamentals. She emphasized the importance of avoiding panic and discouraged any “fearmongering” amidst the current global uncertainty. The minister stressed that the economic pressures India is facing are largely driven by external factors and highlighted the necessity of responsible policies and clear communication to maintain public confidence.
In light of rising fuel prices, Sitharaman pointed to the recent excise duty cuts on petrol and diesel as a measure to alleviate consumer pressure, despite the expected revenue loss of nearly ₹1 lakh crore. Additionally, she raised the issue of delayed payments to micro, small, and medium enterprises (MSMEs), revealing that around ₹8.1 lakh crore is currently tied up in pending dues. She called on public sector companies to settle these payments within the stipulated 45-day period.
India is also dealing with potential disruptions in petroleum and fertiliser imports due to tensions surrounding the Strait of Hormuz, a crucial shipping route for global trade. Fuel prices have seen a significant rise recently, with state-run oil companies hiking petrol and diesel prices once again on Monday. Since mid-May, these prices have increased by over ₹7 per litre.
Earlier, Prime Minister Narendra Modi had urged citizens to exercise caution in their spending and avoid unnecessary purchases in light of the escalating global economic uncertainty linked to the West Asia conflict.
