Indian Prime Minister Narendra Modi has called on citizens to reduce fuel consumption, limit overseas travel, and pause gold purchases in response to the severe economic impact of the ongoing war involving Iran, the U.S., and Israel [1]. In a public address in Hyderabad on May 11, 2026, Modi highlighted the surge in global fuel costs and urged the use of public transport, work-from-home arrangements, and carpooling to conserve fuel [1]. India, which imports nearly 85% of its fuel needs, is particularly vulnerable as it relies on the Strait of Hormuz for about 50% of its crude imports, 60% of its liquefied natural gas, and nearly all of its LPG supplies [1].
The conflict has led to a spike in global oil prices, with President Donald Trump rejecting Iran's counterproposal to end the war, further dashing hopes for peace and exacerbating market volatility [1]. The rupee has come under strain, trading near an all-time low against the dollar, while higher energy costs are expected to significantly widen India's trade and current account deficits [1]. Modi emphasized that reducing foreign travel and gold imports would help conserve foreign currency reserves, as the country spent $174.9 billion on crude and petroleum products (22% of total imports) and nearly $72 billion on gold imports in the financial year ended March 2026 [1].
The market reacted sharply to Modi's appeal: shares of Indian jewelry companies fell by as much as 10% on Monday, with Tata group-owned Titan dropping nearly 6% in early trade [1]. Shares of IndiGo, a major Indian airline, also fell 2.8%, as the company continues to expand its international routes, with expectations that overseas flights will account for 40% of daily services by 2030 [1].
UBS Securities described the Middle East conflict as a "historically large energy shock with asymmetric macro risks," and lowered its forecast for India's economic growth in the financial year ending March 2027 to 6.2% from 6.7% [1]. Former Indian ambassador Nirupama Rao stated, "I don't believe that a [economic] shock is around the corner," but warned of "difficult times ahead" unless the Middle East crisis is resolved [1]. Despite these pressures, the Indian government has kept retail fuel prices stable at the pump by cutting taxes to ease the burden on oil companies [1].
CONCLUSION
The ongoing Iran war has triggered a significant energy shock for India, prompting urgent calls from Prime Minister Modi to curb fuel and gold consumption. Market reactions have been swift, with notable declines in jewelry and airline stocks, and analysts have revised down India's economic growth outlook. The situation remains highly sensitive to developments in the Middle East conflict.