Prime minister (PM) Narendra Modi on Monday made a fresh appeal for austerity and conservation measures amid escalating tensions in West Asia, urging citizens to reduce fuel consumption, avoid unnecessary imports and postpone discretionary spending such as gold purchases and foreign travel. The appeal, his second within 24 hours, comes against the backdrop of rising crude oil prices, volatile global markets, and fears of prolonged geopolitical instability that could affect India’s economy and foreign exchange reserves.
Indian equity benchmark indices traded sharply lower for the second consecutive session on Tuesday morning amid escalating geopolitical tensions, with the Sensex falling as much as 474 points or 0.62% to an intraday low of 75,541 and the Nifty declining 126 points or 0.53% to 23,689, while IT, chemicals, realty, cement and financial stocks emerged among the biggest losers with declines of over 2%.
Addressing a public gathering at Vadodara in Gujarat, PM Modi described the ongoing conflict in West Asia as one of the biggest crises of the decade and warned that the situation was creating severe pressure on global supply chains and imported commodities.
“If the corona pandemic was the biggest crisis of this century, then the conditions created by war in West Asia are among the biggest crises of this decade,” the prime minister says.
He says the Union government was working to minimise the impact of global disruptions on ordinary citizens, but stressed that public participation was critical during such a period.
“As citizens of India, we must prioritise our duties,” PM Modi says, adding that every small effort to reduce dependence on imports would help the country conserve foreign exchange reserves.
The prime minister pointed out that India spends lakhs of crores of rupees on imports, particularly crude oil, while international prices and supply disruptions are adding further strain.
“A major portion of India’s imports is crude oil. Unfortunately, the region that supplies much of the world’s oil is currently caught in conflict and war,” he says.
PM Modi urged citizens to reduce petrol and diesel consumption wherever possible by increasingly using metro services, electric buses and public transport. He also called for greater adoption of carpooling and encouraged electric vehicle owners to assist others.
“I spoke about this yesterday in Karnataka and Telangana, and today I am emphasising it again in Gujarat,” he says.
The prime minister also advocated wider adoption of work-from-home arrangements and virtual meetings in both government and private offices to reduce fuel consumption and commuting costs. He suggested that some schools temporarily consider online classes.
Highlighting the pressure created by edible oil imports, PM Modi appealed to citizens to reduce cooking oil consumption, saying the move would benefit both the country and public health.
He also urged people to postpone gold purchases until conditions stabilise.
“The import of gold also causes huge foreign exchange outflow. I urge all countrymen that until conditions normalise, we should postpone purchasing gold. There is no need for gold right now,” PM Modi says.
The prime minister further renewed his push for the 'vocal for local' campaign, asking citizens to replace imported goods with locally manufactured products and support domestic entrepreneurs.
In the agriculture sector, PM Modi encouraged farmers to move towards natural farming and indigenous fertilisers while replacing diesel pumps with solar-powered alternatives.
The prime minister also criticised the growing trend of destination weddings and overseas vacations, saying such activities lead to significant foreign exchange expenditure.
“It has become fashionable that as soon as vacations begin, children are handed tickets to foreign countries. People spend vacations abroad,” he says.
“Nowadays, foreign travel and destination weddings abroad have become a growing trend,” he added, while urging citizens to choose Indian tourist destinations and wedding venues instead.
PM Modi specifically promoted the Statue of Unity in Gujarat as a potential destination for tourism and weddings, saying it could emerge as a major national attraction.
The prime minister says the measures he proposed were 'small efforts' but stressed that collective action by 140 crore Indians could become the country’s greatest strength during difficult times.
The repeated calls for austerity and conservation appear to have unsettled financial markets, with analysts interpreting the PM’s remarks as a signal that elevated crude oil prices and economic pressures may persist longer than expected.
Stock market participants are increasingly viewing the government’s messaging as an indication of reduced policy appetite for measures that could further widen fiscal and current account deficits amid rising geopolitical risks.
Equity benchmark indices fell sharply in early trade on Tuesday as rising crude oil prices and uncertainty surrounding the West Asia conflict weakened investor sentiment.
The 30-share BSE Sensex dropped 525.44 points to 75,489.84 in early trade, while the NSE Nifty declined 164.5 points to 23,651.35.
The rupee also weakened sharply, depreciating 35 paise to hit a record low of 95.63 against the US dollar after renewed concerns over the conflict pushed global crude oil prices higher.
Market sentiment remained under pressure after US president Donald Trump says he was unhappy with Iran’s response to a US-backed peace proposal, calling Tehran’s position 'totally unacceptable'.
The prolonged tensions in West Asia could further tighten global oil supplies, particularly if shipping routes such as the Strait of Hormuz face disruptions.
Meanwhile, rating agency CRISIL Ratings has revised its India economic outlook, warning that rising geopolitical risks could affect growth and inflation.
CRISIL says it now expects India’s gross domestic product (GDP) growth to slow to 6.6% in fiscal 2027 while retail inflation could average 5.1%.
The agency also revised its Brent crude oil price forecast upward to US$90-US$95 per barrel from the earlier estimate of US$82-US$87, citing the possibility of prolonged disruptions linked to the Strait of Hormuz.
According to CRISIL, the ongoing conflict has highlighted the importance of strengthening India’s energy and food security while accelerating structural reforms to maintain long-term economic resilience.
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Proposal for Strengthening Foreign Exchange
Reserves and Financial Transparency
To address the deteriorating situation of Foreign Currency Reserves and curb
unaccounted financial flows, the following measures are proposed:
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Mandatory Banking Channels: All fund transfers, both domestic and
international, must be conducted exclusively through authorized banking
channels. Any use of unauthorized financial agencies (such as Angadias or
Hawala networks) should be prohibited, with violations attracting a minimum of
three years of rigorous imprisonment.
Regulation of Precious Metals: The GST rate on the sale and purchase of Gold
and Silver should be increased to an average of 18%. Furthermore, all such
transactions must be routed through banking channels with mandatory PAN
verification. Non-compliance should result in a minimum of three years of
rigorous imprisonment.
LRS Limit Revision: The limit for the Liberalised Remittance Scheme (LRS) should
be reduced from the current USD 250,000 to USD 75,000 per financial year to
conserve foreign exchange.