Indian economy resilient but West Asia crisis exerting pressure on forex: Sitharaman

Defending Prime Minister Narendra Modi’s appeal to conserve foreign exchange, Union Finance Minister Nirmala Sitharaman said the Indian economy is resilient but the West Asia crisis is exerting pressure on its foreign exchange outgo due to high crude oil, fertiliser and gold prices amid the ongoing conflict.

Sitharaman said that the statement must be viewed in the context of volatile global commodity markets and rising import costs. “It is because of high international crude prices and the high crude prices are ever-changing,” she added.

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“India was also grappling with an unimaginable increase in international fertiliser and gold prices. To just put it in context, all these three payments will have to be in foreign exchange. There is no rupee trading there,” she said, adding, “We should please understand the context of these three Fs: Fuel, fertiliser and foreign exchange,” Sitharaman said.

She further highlighted the stress on micro, small and medium enterprises (MSMEs), saying prolonged uncertainty made business planning difficult. “India cannot afford fear-mongering. We need to give confidence to the people with our words and with our action.”

The Finance Minister said government’s policy response had been very calibrated and focused on supporting MSMEs, exporters and sectors facing working capital stress while preserving overall growth momentum.

Crude oil prices slumped over 4% on Monday, with Brent crude falling below the $100-per-barrel mark. The July contract of Brent on the Intercontinental Exchange was trading at $99.22 per barrel, down 4.17% from its previous close. The July contract of West Texas Intermediate (WTI) fell 4.53% to $92.22 a barrel.