As tensions in West Asia continue to cast a shadow over global markets, the Narendra Modi government is increasingly focusing on one key concern, conserving India’s foreign exchange reserves. On Monday, (May 25) Union Finance Minister Nirmala Sitharaman called for increased focus on 3Fs: fuel, fertiliser and forex amid the West Asia crisis.
Speaking at the SIDBI Foundation Day programme in Mumbai, Sitharaman said PM Modi’s recent appeal to conserve foreign exchange has become “very important” in the current global environment.
Why the government is sounding the alarm
Sitharaman said India’s economic challenges are currently “more external” in nature, largely because of the country’s dependence on imports for critical commodities like crude oil, fertilisers and gold.
“Just imagine all of them coming together because of that West Asia crisis,” she said, referring to rising fuel costs, supply chain disruptions, uncertainty in export orders and pressure on working capital.
According to the finance minister, the impact is not limited to diplomacy or geopolitics anymore. Any prolonged instability in West Asia could directly affect India’s economy through higher import costs and logistics disruptions.
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Gold imports emerge as a major concern
While crude oil and fertilisers remain essential imports, the government is also increasingly worried about India’s appetite for gold, which continues to put pressure on the country’s foreign exchange reserves. India’s gold imports touched a record $71.98 billion in 2025-26, a jump of over 24% compared to the previous year. The spike has been attributed largely to soaring global gold prices.
Earlier, Prime Minister Modi had urged citizens to avoid “unnecessary” gold purchases, overseas weddings and foreign vacations for at least a year in order to help conserve foreign exchange.
“If we make a few small changes for a year, we can save substantial foreign exchange,” PM Modi had said.
In a move aimed at discouraging imports, the government has also raised import duty on gold and silver from 6% to 15%.
How global tensions could hit common people and MSMEs
Sitharaman said the government’s immediate priority is to shield citizens, exporters and small businesses from the fallout of global instability.
“The approach has been and will have to be to protect citizens, support MSMEs, safeguard exporters, keep supply chains moving and maintain economic stability,” she said.
The warning comes at a time when Indian businesses are already grappling with fluctuating freight rates and uncertainty in global trade routes due to tensions in West Asia.
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‘Pessimistic narrative’ remark
The finance minister also took aim at critics who, according to her, are attempting to create a negative perception about the Indian economy.
“Some sections are trying to decry and create a pessimistic narrative, which is not right,” Sitharaman said. Despite external pressures, the government has repeatedly maintained that India remains one of the world’s fastest-growing major economies.
What experts are saying
Market experts believe gold imports are playing a disproportionately large role in widening India’s current account pressures.
Deepak Shenoy, CEO of Capitalmind Mutual Fund, recently argued that India’s current account could actually remain in surplus if gold imports were excluded.
“If you removed gold, India’s current account has been a surplus for 11 of the last 12 quarters,” Shenoy said, revealing that reducing imports or reusing idle domestic gold could significantly ease forex pressure.
TOPICSFinance Ministryfuel pricesNirmala SitharamanWest AsiaThis article was first uploaded on May twenty-five, twenty twenty-six, at ten minutes past two in the afternoon.