Modi Warns Indians on Iran War Energy Risk

Indian Prime Minister Narendra Modi urged citizens Sunday to reduce fuel consumption, limit international travel, and hold off on gold purchases, CNBC reported. The appeal, delivered in Hyderabad, underscored a deepening India energy shock as the ongoing Iran conflict drives global oil prices sharply higher.

India’s Import Exposure Laid Bare

India sources nearly 85% of its fuel requirements from abroad. Roughly half of its crude oil transits the Strait of Hormuz, along with around 60% of its liquefied natural gas and virtually all of its liquefied petroleum gas supplies. In the financial year ended March 2026, crude and petroleum spending totalled $174.9 billion, representing 22% of the country’s total import bill.

Modi argued that scaling back overseas trips and pausing gold purchases would help protect India’s foreign currency reserves. The country is the world’s second-largest gold consumer after China, importing nearly $72 billion worth annually. Around 32.7 million Indians travelled abroad in 2025.

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Markets React Quickly

Equity markets responded sharply on Monday. Shares in Tata-owned jeweller Titan shed close to 6% in early trade. Budget carrier IndiGo, which is expanding its international routes, slid roughly 3%.

The rupee is also trading near a record low against the dollar. Elevated oil costs are expected to widen both the trade deficit and current account deficit meaningfully over the coming months.

Background: A Warning Already on the Books

India’s vulnerabilities were flagged well before this week’s appeal. In March, chief economic adviser V. Anantha Nageswaran cautioned that the trade deficit would rise significantly in the fiscal year ending March 2027. He noted that managing it would require shared sacrifice across government, households, and businesses.

Global brokerage UBS Securities cut its Indian growth forecast to 6.2% for the same period, down from 6.7%, describing the Middle East conflict as a historically large energy shock with asymmetric macro risks.

Also Read: UBS Cuts India GDP Forecast on Middle East Risk

Government Holds the Line on Pump Prices

Despite the external pressure, New Delhi has kept retail fuel prices steady. The government chose to reduce taxes on oil companies rather than pass costs to consumers at the pump. That decision has kept demand largely intact but leaves less fiscal headroom if prices climb further.

Former Indian ambassador to the United States Nirupama Rao told CNBC the country faces difficult times ahead without a resolution to the Middle East crisis, though she stopped short of predicting an imminent economic shock.

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