Prime Minister Narendra Modi has urged Indians to work from home, avoid international trips, and refrain from buying gold amidst the United States-Israeli war on Iran. This conflict has led to a significant surge in global energy prices, consequently putting immense pressure on India’s foreign exchange reserves.
Modi made his plea during a public event in the southern city of Hyderabad on Sunday.
Here is more about what Modi said, what’s behind the Indian government’s concerns, and how they’re linked to the war on Iran.
What Did Modi Say?
Modi advised citizens to opt for online meetings over physical gatherings and embrace the work-from-home model, similar to practices adopted globally during the COVID-19 pandemic. He emphasized that such measures would significantly reduce fuel consumption.
Additionally, Modi urged people to utilize public transport and carpooling to conserve fuel. He also called on families to reduce their cooking oil consumption, describing this move as both healthy and patriotic.
Furthermore, Modi requested Indians to avoid purchasing gold and to curtail non-essential overseas travel for at least a year. The Prime Minister also advised farmers to reduce their fertilizer use by as much as half.
He justified these lifestyle and planning changes by stating: “In the current situation, we must place great emphasis on saving foreign exchange.”
What is the ‘Current Situation’ Modi Was Referring To?
Simply put, Modi was referring to the war on Iran and its far-reaching economic consequences, particularly for India.
Earlier in the conflict, Modi had drawn parallels between the economic crisis caused by the war and the situation during the COVID-19 pandemic. On Sunday, he extended this comparison, urging Indians to adopt restrictive measures similar to those imposed globally by the coronavirus crisis.
Oil prices have surged significantly due to the war on Iran, which commenced on February 28. A barrel of Brent crude, the international benchmark, was valued at $72.87 on February 27. By Monday, its price had climbed to $105.45, representing an almost 50 percent increase.
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Iranian attacks on oil and gas facilities in the Gulf during the initial weeks of the war severely impacted energy supplies. Since early March, Iran has also restricted passage through the Strait of Hormuz, a crucial narrow waterway through which 20 percent of the world’s oil and liquefied natural gas supplies passed prior to the conflict. Iran has permitted passage only for vessels from select countries, requiring them to negotiate transit with the Islamic Revolutionary Guard Corps.
In April, the US announced a naval blockade on ships entering or leaving Iranian ports, further exacerbating the disruption of global oil and gas supplies.
With escalating fuel costs, airlines have increased ticket prices. According to the travel search site Kayak, the average international airfare from the US to all destinations was $1,101 in the last week of April, marking a 16 percent increase compared to the same period a year earlier.
Nearly half of the world’s traded urea, the most widely used fertilizer, along with large volumes of other fertilizers, are exported from Gulf countries via the Strait of Hormuz. These vital supplies have now faced dramatic disruptions.
“Patriotism is not only about the willingness to sacrifice one’s life on the border. In these times, it is about living responsibly and fulfilling our duties to the nation in our daily lives,” Modi stated.
According to Modi’s comments, these duties and responsibilities primarily center on safeguarding India’s foreign exchange reserves.
What Are India’s Foreign Exchange Reserves?
As of May 1, India’s foreign exchange reserves stood at $690.69 billion, a decrease of $7.79 billion, or approximately 1.12 percent, from the end of March, as reported by the Reserve Bank of India (the central bank).
Compared to the pre-war period, the decline in India’s reserves is more precipitous. On February 27, India’s foreign exchange reserves were $728.5 billion.
The International Monetary Fund (IMF) projected India’s current account deficit (CAD) to reach $84 billion in 2026. A negative CAD indicates that a country has spent more money than it has earned.
What Do Oil, Gold, Foreign Travel, and Fertilizers Have to Do With This?
India ranks as the world’s third-largest oil importer, trailing only China and the US.
From April 2025 to March, during the last Indian financial year, the country imported crude oil valued at $123 billion, making it the single largest contributor to India’s import budget.
In second place is gold. Indians imported gold worth $72 billion in the 2025-2026 fiscal year, making India the second-largest gold importer globally, after China.
According to travel insurance firm ACKO, Indians spent $31.7 billion on foreign travel in 2023-2024. Data from the Bureau of Immigration shows that approximately 30.9 million Indian nationals departed India in 2024, an increase from about 27.9 million in 2023.
India is also the world’s largest importer of urea, importing approximately 10 million tonnes of the fertilizer last year, according to analysis from S&P Global.
Why Is This Worrying for India Right Now?
India’s foreign exchange reserves are being depleted by substantial imports of oil, gold, and fertilizers, as well as by significant spending from Indians traveling abroad.
However, among these expenses, cutting back on oil and fertilizers is challenging for India. Energy imports are crucial for driving India’s economy, and fertilizers are vital for both the country’s agrarian economy—with over half of families dependent on agriculture—and for ensuring food supplies.
This leaves gold and foreign travel as areas where reductions could be made. However, it remains unclear whether Indians will heed Modi’s call.
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