<p>The rupee dropped to a new low and stock markets slumped, wiping out over Rs 6 lakh crore from the capitalisation of listed entities on Monday, as Prime Minister Narendra Modi’s appeal to people to cut gold, fuel, fertiliser and discretionary spending to conserve foreign exchange sparked concern over the economy and currency stability.</p><p>The rupee weakened by 82 paise to settle at a record low of 95.31 against the US dollar.</p><p>The benchmark Sensex of the BSE tanked 1,312.91 points, while Nifty 50 slumped 360.30 points. In the last three trading sessions, the Sensex cumulatively lost 2.5% and the Nifty 2.1%.</p><p>While the rupee and the stock markets have been under pressure since the beginning of the US-Israel-Iran conflict on February 28, Modi’s comment sparked concern about the balance of payment challenges and stress in the economy.</p> .<p>Japanese financial services firm Nomura said the prime minister’s austerity appeal is a signal that India’s fiscal position is reaching a “tipping point”.</p><p>In a note to its clients, Nomura projected that India’s current account deficit (CAD) would widen to 2.4% of GDP in FY27. On the fiscal deficit, it said it would rise to 4.6% of GDP, higher than the budgetary target of 4.3%.</p><p>Nomura said the PM’s remarks indicate that the government may increasingly look to households to share the burden of elevated energy prices.</p> .<p>The immediate impact could be in the form of increase in petrol and diesel prices. Sources said retail prices of diesel and petrol are likely to be hiked by the end of this week.</p><p>High outgo on oil and gold imports and weakening rupee are the key factors behind the widening in CAD. This simply means that the country is spending more foreign currency abroad than it is earning.</p><p>According to the latest Reserve Bank of India (RBI) data, India’s current account deficit stood at $30.1 billion or 1% of GDP in the April-December 2025 period.</p> .<p>Addressing an event in Telangana on Sunday, Modi urged people to revive work-from-home practices, avoid buying gold and non-essential foreign travel, cut fuel consumption and discretionary spending to help the country save foreign exchange.</p><p>Jateen Trivedi, a vice president at LKP Securities said the PM’s comment has “raised concerns about the pressure of a higher import bill on India’s economy and currency stability”.</p> .<p>“While the government’s message was aimed at promoting long-term self-reliance and reducing unnecessary imports, the immediate market reaction remained cautious, which weighed on sentiment in the currency market,” Trivedi said.</p><p>Crude oil, gold, vegetable oil and fertilisers accounted for nearly one-third of the country’s total import bill of around $775 billion recorded in 2025-26.</p>
<p>The rupee dropped to a new low and stock markets slumped, wiping out over Rs 6 lakh crore from the capitalisation of listed entities on Monday, as Prime Minister Narendra Modi’s appeal to people to cut gold, fuel, fertiliser and discretionary spending to conserve foreign exchange sparked concern over the economy and currency stability.</p><p>The rupee weakened by 82 paise to settle at a record low of 95.31 against the US dollar.</p><p>The benchmark Sensex of the BSE tanked 1,312.91 points, while Nifty 50 slumped 360.30 points. In the last three trading sessions, the Sensex cumulatively lost 2.5% and the Nifty 2.1%.</p><p>While the rupee and the stock markets have been under pressure since the beginning of the US-Israel-Iran conflict on February 28, Modi’s comment sparked concern about the balance of payment challenges and stress in the economy.</p> .<p>Japanese financial services firm Nomura said the prime minister’s austerity appeal is a signal that India’s fiscal position is reaching a “tipping point”.</p><p>In a note to its clients, Nomura projected that India’s current account deficit (CAD) would widen to 2.4% of GDP in FY27. On the fiscal deficit, it said it would rise to 4.6% of GDP, higher than the budgetary target of 4.3%.</p><p>Nomura said the PM’s remarks indicate that the government may increasingly look to households to share the burden of elevated energy prices.</p> .<p>The immediate impact could be in the form of increase in petrol and diesel prices. Sources said retail prices of diesel and petrol are likely to be hiked by the end of this week.</p><p>High outgo on oil and gold imports and weakening rupee are the key factors behind the widening in CAD. This simply means that the country is spending more foreign currency abroad than it is earning.</p><p>According to the latest Reserve Bank of India (RBI) data, India’s current account deficit stood at $30.1 billion or 1% of GDP in the April-December 2025 period.</p> .<p>Addressing an event in Telangana on Sunday, Modi urged people to revive work-from-home practices, avoid buying gold and non-essential foreign travel, cut fuel consumption and discretionary spending to help the country save foreign exchange.</p><p>Jateen Trivedi, a vice president at LKP Securities said the PM’s comment has “raised concerns about the pressure of a higher import bill on India’s economy and currency stability”.</p> .<p>“While the government’s message was aimed at promoting long-term self-reliance and reducing unnecessary imports, the immediate market reaction remained cautious, which weighed on sentiment in the currency market,” Trivedi said.</p><p>Crude oil, gold, vegetable oil and fertilisers accounted for nearly one-third of the country’s total import bill of around $775 billion recorded in 2025-26.</p>