“Fertiliser prices have hit unimaginable levels,” Union Finance Minister Nirmala Sitharaman said on Monday as she warned that India must keep a close watch on the “three Fs” — fuel, fertiliser and forex — at a time when the US-Iran war is rattling global markets and pushing up costs in the country.
Speaking at the 37th anniversary event of Small Industries Development Bank of India in Mumbai, Sitharaman’s remarks came amid yet another fuel price hike. Petrol and diesel prices were raised for the fourth time in less than two weeks on Monday. In the last 11 days, petrol prices have been raised by Rs 7.38 per litre.
The sharp rise in fuel prices follows disruptions at the Strait of Hormuz, a critical route for oil supply. As India imports nearly 85-90 per cent of its crude oil requirements, it has been among the worst affected by the surge in crude oil prices.
Against this backdrop, Sitharaman said Prime Minister Narendra Modi’s recent appeal to conserve foreign exchange reserves has become “very important”. “There is a need to focus on the three Fs – fuel, fertiliser and forex,” the finance minister said, adding that rising crude oil prices were only one part of the challenge.
Apart from fuel, she said, fertiliser prices had climbed to “unimaginable” levels, while soaring gold prices were creating “some challenges” for India on the external front.
Her comments come just days after PM Modi urged citizens and industries to help reduce pressure on India’s foreign exchange reserves. The Prime Minister had called for avoiding non-essential imports, reducing unnecessary foreign exchange outflows, postponing discretionary foreign travel and even avoiding gold purchases for a year.
The concern is not without reason. A prolonged rise in crude oil prices threatens to widen India’s current account deficit, weaken the rupee and push imported inflation even higher. The rupee had recently slipped close to the 97-per-dollar mark before recovering slightly.
Iran War: ‘Impact Far Beyond Geopolitics’
Sitharaman said the impact of the Middle East crisis stretches far beyond geopolitics.
“The Middle East crisis is not only a diplomatic or geopolitical issue,” she said. “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.”
“Just imagine all of them coming together,” she added.
Even as she acknowledged the pressure points, the finance minister repeatedly pushed back against what she called an exaggerated narrative of economic collapse.
“India’s domestic economic situation remains positive and resilient even today,” Sitharaman said. Without naming anyone, she took a swipe at critics and “naysayers” who, according to her, were portraying the situation as if everything was “crumbling”.
“There is a section of Indians who very quickly want to decry the achievements of our own people,” she said.
“All the good that is being done by the common people themselves, that is forgotten. And a pessimistic, cynical narrative is generated, which is just not right.”
“India cannot afford fearmongering. We need to give confidence to our people with our words and with our actions,” she added.
Centre Has Taken A Revenue Hit: Finance Minister
Sitharaman also defended the Centre’s handling of rising fuel prices, saying the government had already taken a major revenue hit to shield consumers from an even sharper spike.
“The government is estimated to take a revenue impact of over Rs 1 lakh crore” due to the excise duty reduction on petrol and diesel, she said.
The minister also flagged stress in the MSME sector, saying delayed payments worth Rs 8.1 lakh crore were hurting working capital and slowing growth. She urged public sector undertakings to ensure dues to MSMEs are cleared within the mandatory 45-day period.
At the same time, Sitharaman argued that India’s broader economic indicators continue to remain strong despite global uncertainty. She pointed to rising GST collections, sustained domestic demand and improving private sector investment as signs that the economy continues to hold firm even as external shocks intensify.