Union Finance Minister Nirmala Sitharaman has reassured that the Indian government is keeping a vigilant eye on the repercussions of the ongoing West Asia crisis on the nation’s economy, particularly the sectors of fuel, fertilisers, and foreign exchange reserves. While addressing an event commemorating the anniversary of the Small Industries Development Bank of India, she highlighted that the escalating crude oil and fertiliser prices represent significant challenges. Fertiliser costs have soared to unprecedented levels, and the increasing gold prices are further straining the economy.
Despite these external challenges, Sitharaman affirmed that India’s economic fundamentals remain robust. She cautioned against any panic-inducing narratives, emphasizing that “fearmongering” is not an option for the country amid global uncertainty. The finance minister articulated that the majority of current economic pressures are externally driven, underscoring the importance of maintaining public trust through prudent policies and effective communication.
In a bid to alleviate consumer pressure, the government has recently slashed excise duty on petrol and diesel, a decision that Sitharaman noted would result in an approximate revenue loss of ₹1 lakh crore. However, she deemed this step necessary to provide relief to the public. Additionally, she expressed concerns about the delayed payments to micro, small, and medium enterprises (MSMEs), revealing that pending dues amount to around ₹8.1 lakh crore. Sitharaman urged public sector entities to ensure that MSME payments are settled within the stipulated 45-day period.
The nation also faces apprehensions regarding possible disruptions in the import of petroleum products and fertilisers due to tensions near the Strait of Hormuz, a critical global shipping lane. Fuel prices have surged in recent weeks, with state-run oil companies increasing petrol and diesel prices once again on Monday. Since mid-May, these prices have risen by more than ₹7 per litre. Echoing these concerns, Prime Minister Narendra Modi has previously advised citizens to exercise caution in their spending and avoid unnecessary purchases as the global economic landscape remains uncertain due to the West Asia conflict.