PHOTO: AFP/FILE

ANN/THE STRAITS TIMES

Prime Minister Narendra Modi has made austerity appeals to Indians, urging them to place “nation first above personal comfort”, and avoid foreign trips, use less fuel and start working from home (WFH) more often.

PM Modi made this request during a public meeting on May 10, after inaugurating infrastructure projects in Secunderabad city in Telangana state. He urged measures to curtail the consumption of petroleum products and foreign exchange reserves, warning of growing economic uncertainty as geopolitical tensions in West Asia pushed up oil and fertiliser prices and strained global supply chains.

“In this time of global crisis, we have to make a resolution keeping duty paramount and fulfil it with complete dedication,” he said. “A big resolution is to use petrol and diesel sparingly.”

He asked citizens to increase their use of public transport and electric vehicles, and revisit Covid-era measures such as WFH arrangements, virtual meetings, avoid non-essential foreign travel for a year, and prioritise local goods.

He said it is the responsibility of all Indians to ensure that “the foreign exchange spent on purchasing petrol-diesel should also be saved by conserving petrol-diesel”.

Analysts say his speech signals the economic fallout India is grappling with amid the West Asia conflict and rising global fuel prices.

While many countries hiked fuel prices to suppress demand since the start of the Iran war, India increased only the prices of commercial petroleum gas, and duties on export of aviation turbine fuel and naphtha to ensure domestic availability, leaving the pump prices for ordinary consumers unchanged. But this may change soon.

“The global oil market is facing the largest disruption in decades. In these extraordinary times, you need to conserve oil. A government can send signals through moral suasion, as it has now. It is likely that a price signal for demand management through a petrol and diesel price hike will come next,” Mr Dharmakirti Joshi, chief economist at global analytics company Crisil, told The Straits Times.

As global crude oil prices surged from around US$70 per barrel to nearly US$126 per barrel in recent weeks, India’s import bill has ballooned. The country imports around 85 percent of its crude oil needs.

“With the war extending, it doesn’t look like the oil shortage will end soon. So, it is important to conserve oil. The government and oil marketing companies absorbed some of the burden on petrol and diesel till now, and consumers will need to play a role in burden sharing going ahead,” Mr Joshi said.

Defence Minister Rajnath Singh said on May 11 that India has 60 days of crude oil and natural gas reserves and 45 days of petroleum gas.

The rising oil prices, global uncertainty and costlier imports have put the Indian rupee under heavy pressure. It has weakened to near-record low levels, trading around 94.9 rupees against the US dollar as of May 11.

The country’s foreign exchange reserves stand at US$703 billion (S$891.7 billion).

PM Modi asked people to reduce the use of cooking oil, and buy Indian-made products rather than imported goods.

“The PM’s appeal to the nation is a crisis management response to the current account deficit problem due to high crude price and has slightly negative implications for economic growth in fiscal year 2027,” Mr V.K. Vijayakumar, chief investment strategist at Geojit Investments, told Reuters.

“Industries related to the austerity call like petroleum, chemical fertilisers, gold, air travel, hotel and related sectors are impacted,” he added.

Each of the prime minister’s appeals reflects major areas of expense and vulnerabilities in the Indian economy.

To further conserve foreign exchange, Mr Modi said: “The growing culture of weddings abroad, travelling abroad, and vacationing abroad is becoming prevalent among the middle class… During this time of crisis, we should postpone travelling abroad for at least a year.”

Mr Sunil Kumar, the president of the Travel Agents Association of India, said in a statement that the tourism industry “may now experience increased pressure to promote domestic tourism, where margins and revenues are comparatively lower”.

PM Modi also urged people to refrain from the practice of buying gold during festivals for a year, surprising many as the yellow metal is central to weddings, festivals, traditional investment and rural savings.

Gold purchases and foreign travel lead to substantial dollar outflows, adding pressure on India’s current account deficit and foreign exchange reserves.

India also buys more gold than almost any other country in the world, and the metal accounts for 9 percent of the import bill, only second to crude oil. Every year, India purchases more than 700 tonnes of gold. With domestic gold production at only one to two tonnes annually, it imports more than 90 percent of its requirements.

In terms of overseas travel, Indians have recently become among the world’s most active tourists – driven by rising incomes and better connectivity. In 2025, a record 32.7 million Indians travelled abroad, up from 30.8 million in 2024. The United Arab Emirates (UAE), Saudi Arabia and Thailand are the top destinations, with 43.5 percent travelling for leisure and 34 percent visiting friends and family, according to the Ministry of Tourism.