PM Modi’s Fuel & Gold Warning: What It Signals For India’s Economy Amid West Asia Crisis

Added: 2026-05-12

[00:00:00]Well it is twice in the last 24 hours that Prime Minister Narendra Modi has talked about conserving fuel and reducing the dependence on imported products. Ah give us an understanding what should the citizens of the country understand is there is a serious situation that the Indian economy is facing as the aftermath of the West Asia crisis.

[00:00:19]Hi. So the problem is that we don't necessarily know how long this war could actually stretch. As we understand there is no solution inside which basically means that if this war stretches beyond another one and a half months the world could be in a dire straits situation as far as energy security is concerned. So it's always good to prepare before hand. Ah you know in fact India has been a laggard compared to Asian economies in terms of any kind of policy advisory. We still haven't really had any formal policy advisory more like ah national appeal that the PM is doing.

[00:00:52]If you look at other Asian economies, they have already implemented things like work from home, things like restricting economic activities to some extent, industrial capacities have been also constrained, so all of those steps have already been taken by Asian and other Asian peers in the last one and a half months, but India has only started to not talk about it. So I think it's high time we actually start preparing for a more prolonged energy crisis. A you know which could hit as dramatically as we already are seeing the impact of that playing out in the financial sector.

[00:01:21]We've seen the rupee really falling all the time. We're also seeing the impact being played out in all asset classes. To be very honest, so I think there's a need to start discussing the economic pain of this energy crisis, which is likely to also hit consumers eventually. What the Prime Minister has said, do not buy gold, for the next one year. Do not you know travel unnecessarily in case you are planning an international travel if you can avoid, avoid for the next one year. Ah forget about imported goods and foreign goods stop purchasing all of those goods as well. What does this really mean if Indians stop doing that for the next one year. How will it impact the economy? C This is basically targeted more to ensure that we have, you know, incrementally less of an effect outflow from the economy point of view, of course, to that extent, it is, you know, it's more of an effect story than necessarily an economic activity story because a large chunk of the restriction that he wants to sort of put, you know, in terms of the national level, are largely focusing on, you know, the import side of the economy. So I am not sure how the economic impact would be playing out in the growth story it's more ah current account and ah pain that could be you no reduce at the margin. Of course it is again because it is a public appeal, it is not a policy institution at this point in time. Ah so you can't expect a homogeneous ah behaviour from citizens to stop doing these ah things at the Prime Minister ah you no sort of mentioned. If there is actually a restriction in terms of you know import demand and in terms of foreign travel and in terms of any kind of you know FX out flows that we are facing then they could be a different story all together. I think these are just national appeals, immediately they do not impact my numbers at this point in time. If there is a gold restriction that comes into play. Either in the form of higher duty or quantum restriction that would be a decent delta on the current account. Because gold now accounts for largely 95% of our total imports. It used to be just about 5.6% just five years ago. So it's the second largest third largest import that we have this point in time and again a big strain on our books. Busides that you know they could also restrict things like LRS all of that. Those things we will have to see but at this point they are just ah national appeals and they don't impact my numbers immediately.

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