(Adnkronos) – Indian Prime Minister Narendra Modi has appealed to citizens to reduce consumption and curb non-essential spending, as economic pressure mounts due to rising energy prices and international tensions over the war in Iran. The statements, made in Hyderabad, in which he urged the population to “work from home if possible,” to limit non-essential foreign travel, to consume less fuel, and even to reduce gold purchases – traditionally considered a safe haven in the country – have attracted the attention of markets and economists, who interpret them as a sign of the Indian economy’s increased vulnerability to external shocks.
Modi therefore urged Indians to curb consumption and adopt a more frugal lifestyle, at a time of increasing pressure on the country’s foreign accounts. A message that, according to the BBC, recalls the national mobilization campaigns during the pandemic, but which this time is mainly linked to the need to preserve foreign currency and financial stability during a period of significant economic stress.
At the root of India’s difficulties is its strong dependence on energy imports: about 90% of the oil and half of the gas consumed by the country come from abroad. Geopolitical tensions and difficulties on global energy routes have increased the demand for dollars, while foreign investments slow down and exports lose momentum. Foreign exchange reserves remain high, but are declining, and economists warn that pressure on the rupee could intensify in the coming months.
According to several analysts cited by the BBC, the government’s strategy aims to curb domestic demand to mitigate the impact of external shocks, but there is no shortage of criticism from those who believe that “patriotic” austerity cannot replace market dynamics. With fuel price increases already underway and inflation rising, India finds itself having to balance consumer protection with the need to avoid deeper fiscal and currency imbalances.
