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India Faces Supply Chain Strain as Middle East Tensions Push Oil Costs Higher

Indian Prime Minister Narendra Modi called for fuel conservation measures Sunday, citing severe economic risks from escalating Middle East conflict. Modi urged citizens to reduce fuel consumption through public transit and carpooling, limit international travel, and suspend gold purchases to preserve foreign currency reserves. India imports roughly 85% of its fuel and depends on the Strait of Hormuz for approximately 50% of crude oil, 60% of liquefied natural gas, and nearly all liquefied petroleum gas supplies. Rising energy costs threaten to widen India's trade deficit and current account deficit while pressuring the rupee toward historic lows against the dollar. Indian equity markets reflected concerns Monday, with jewelry stocks declining as much as 10% and airline IndiGo also falling. The government has maintained domestic fuel prices despite global cost increases, signaling heightened concern over broader economic impacts.