Fuel, fertiliser & gold imports creating challenges externally: FM Nirmala Sitharaman

New Delhi: Finance Minister Nirmala Sitharaman on Monday said the West Asia crisis is exerting pressure on India’s foreign exchange due to higher outgo on fuel, fertiliser and gold imports.

“The West Asia crisis is not only a diplomatic or geopolitical issue. For businesses and common people, it can mean higher fuel cost, delayed cargo, costlier shipping, shortage of inputs, pressure on working capital and uncertainty in export orders,” the Finance Minister said at the Small Industries Development Bank of India (SIDBI) foundation day event in Mumbai.

While underlining the challenges on the external front due to the West Asia conflict, Sitharaman claimed that India’s domestic economic situation remains positive and resilient.

She accused the Opposition leaders of fear-mongering and creating a “cynical narrative” about the Indian economy. She emphasised that such a narrative is wrong and would hurt the economy. “India cannot afford fear-mongering,” she added.

Amid the ongoing West Asia conflict, Sitharaman called for sharper focus on what she termed the three “Fs” — fuel, fertiliser, and foreign exchange.

“We should please understand the context of these three Fs: fuel, fertiliser, and foreign exchange. And the foreign exchange is for, in this context, purchase of gold. So, we need to understand this and we also should appreciate that the challenges are more external-driven,” she said.

“We must also recognise that India’s domestic economic situation remains positive and resilient even today,” she added.

Referring to Prime Minister Narendra Modi’s recent appeal to conserve foreign exchange reserves, Sitharaman said it should be seen in the context of managing external economic stress.

On fuel price hike, she said that due to the reduced excise duty, the government revenues could take a hit of about Rs 1 lakh crore in the current fiscal.

The FM’s comment came after oil marketing companies hiked retail prices of petrol and diesel for the fourth time in
10 days on Monday. Petrol price was hiked by Rs 2.61 per litre and diesel by Rs 2.71 per litre, taking the cumulative increase in 10 days to Rs 7.5 a litre.  

The minister claimed that the government’s approach is focused on protecting citizens, supporting MSEMs, safeguarding exporters and keeping supply chains moving and maintaining economic stability.

She acknowledged that the over 80-day-long West Asia conflict has made future planning difficult for MSMEs and exporters.

Highlights - The West Asia crisis is not only a diplomatic or geopolitical issue. For businesses and common people, it can mean higher fuel cost, delayed cargo, costlier shipping, shortage of inputs, pressure on working capital and uncertainty in export orders. - Union Finance Minister Nirmala Sitharaman

Quote:

“The West Asia crisis is not only a diplomatic or geopolitical issue. For businesses and common people it can mean higher fuel cost delayed cargo costlier shipping shortage of inputs pressure on working capital and uncertainty in export orders."

- Nirmala Sitharaman, Union Finance Minister