Prime Minister Narendra Modi has urged citizens to resume energy-saving measures from the COVID-19 period, including working from home, reducing overseas travel, and cutting gold purchases, fearing a prolonged war could destabilize India's economy.
Modi said during a public event in Hyderabad, in southern India, on Sunday, that living frugally and with discipline at this time is a form of patriotism.
He emphasized that India must preserve its foreign exchange reserves as much as possible amid the escalating crude oil price crisis.
Analysts view this announcement as the government's most severe measure since the Middle East crisis began affecting the global economy.
Currently, India imports as much as 90% of its crude oil demand and faces soaring energy costs running into billions of dollars after the war in Iran caused the closure of the Strait of Hormuz—one of the world's key oil shipping routes—for over two and a half months.
The Indian leader also urged citizens to switch to public transportation, such as metro trains, and to share rides to reduce fuel consumption.
Additionally, he requested farmers to cut fertilizer use by half to mitigate impacts from fertilizer shortages and rising import costs.
Modi's remarks had an immediate effect on India's financial markets, with the Sensex index plunging more than 1,000 points during Monday morning trading amid concerns that the Indian economy might face a prolonged slowdown.
At the same time, the Indian rupee has weakened to historic lows in recent weeks, increasing import costs and adding inflationary pressures.
Although the Indian government has not raised domestic petrol and diesel prices yet, pressure on state energy companies has been steadily increasing.
The energy crisis is beginning to spread to several key Indian industries, especially glass, plastic, and tile manufacturing, risking the loss of hundreds of thousands of jobs.
Meanwhile, the reduced fertilizer supply raises concerns about agricultural yields and the potential for rising food prices in the future.
Analysts believe Modi's statements may signal that the Indian government is preparing to introduce further energy use controls and possibly raise domestic fuel prices in the near term.
/source: BBC
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