Finance Minister Nirmala Sitharaman on Monday said has become “very important” as the ongoing Iran crisis continues to create pressure on India’s import bill and supply chains.
Speaking at an event in Mumbai, Sitharaman said higher prices of crude oil, fertilisers and are creating challenges for India on the external front, reported news agency Reuters.
She also warned that the conflict could lead to higher fuel costs and delays in cargo movement, affecting both businesses and consumers.
Her comments come days after Modi had urged citizens and industries to help conserve foreign exchange amid rising global uncertainty and pressure on the rupee.
As part of that push, the Prime Minister had called for avoiding non-essential imports and reducing unnecessary foreign exchange outflows. He had also suggested steps such as postponing discretionary foreign travel and to help reduce pressure on India’s external finances.
India has been facing growing strain due to elevated crude oil prices linked to the Iran conflict and disruptions around the Strait of Hormuz, a key global oil shipping route.
The country imports nearly 85-90% of its crude oil requirements, making it highly vulnerable to spikes in global energy prices and a weakening rupee.
The rupee had recently fallen close to the 97-per-dollar mark before recovering slightly, while petrol and diesel prices have been raised four times in less than two weeks.
Economists have warned that prolonged high crude prices could widen India’s current account deficit, increase imported inflation and raise pressure on household expenses and businesses.