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Mumbai: Union Finance Minister Nirmala Sitharaman on Monday backed Narendra Modi’s appeal to conserve foreign exchange, calling it “very important” amid rising global uncertainty triggered by the ongoing Iran crisis.

Speaking at an event in Mumbai, Sitharaman highlighted that escalating global tensions are putting pressure on India’s import bill and supply chains, particularly through rising prices of crude oil, fertilisers and gold.

Rising import costs add pressure

The Finance Minister pointed out that India is facing increasing strain on its external sector due to higher global commodity prices. Crude oil, a critical import for the country, has seen price volatility due to disruptions linked to the Iran crisis.

India imports nearly 85–90% of its crude oil requirements, making it highly vulnerable to global price fluctuations. Any sustained increase in oil prices directly impacts the country’s import bill and foreign exchange reserves.

Sitharaman also warned that the ongoing situation could lead to higher fuel costs and delays in cargo movement, affecting both businesses and consumers across sectors.

Modi’s appeal to conserve forex

Her remarks come shortly after Prime Minister Modi urged citizens and industries to play an active role in reducing unnecessary foreign exchange outflows.

The Prime Minister suggested several measures, including:

• Avoiding non-essential imports
• Postponing discretionary foreign travel
• Reducing gold purchases for at least a year

These steps are aimed at easing pressure on India’s external finances and stabilising the rupee amid global volatility.

Sitharaman emphasised that such collective efforts are crucial at a time when global developments are beyond domestic control but have significant economic implications.

Impact on rupee and inflation

Recent developments have already reflected in currency movements. The Indian rupee had weakened close to the ₹97 per US dollar mark before showing slight recovery.

At the same time, fuel prices have been increased multiple times in recent weeks, adding to inflationary pressures. Higher fuel costs tend to cascade across the economy, increasing transportation expenses and raising prices of essential goods.

Economists warn that if crude oil prices remain elevated for a prolonged period, India could face:

• A widening current account deficit (CAD)
• Rising imported inflation
• Increased financial pressure on households and businesses

Supply chain concerns grow

Apart from pricing pressures, Sitharaman also flagged potential disruptions in global supply chains. The tensions in West Asia, particularly around key shipping routes such as the Strait of Hormuz, could slow cargo movement and increase logistics costs.

Such disruptions may affect sectors ranging from manufacturing to agriculture, further complicating India’s economic outlook.

Balancing growth and stability

While India continues to focus on economic growth, the current global environment has made external stability a priority. Conserving foreign exchange and managing imports efficiently are seen as key strategies to maintain macroeconomic balance.

The government’s push also aligns with broader efforts to reduce dependency on imports and strengthen domestic production capacities under various policy initiatives.

Conclusion

Nirmala Sitharaman’s endorsement of Prime Minister Modi’s call underscores the seriousness of the current global situation. With rising import costs, currency pressures and supply chain uncertainties, conserving foreign exchange has become a critical economic priority.

As geopolitical tensions persist, India’s ability to manage its external vulnerabilities through prudent policies and public cooperation will play a key role in sustaining economic stability.