Prime Minister Narendra Modi on Monday said that the foundation of India’s economy is very strong and the country has adequate availability of petroleum, fertilizer and coal, due to which it can face the trade and energy related disruptions caused by the US-Israel war on Iran. The conflict, which started last month, has affected sectors ranging from air travel to shipping and gas supply. This also includes the near closure of the Strait of Hormuz, which is the main route for the import of 40 percent of India’s crude oil.
How much reserves does India have?
Modi told the lower house of Parliament on Monday that India has adequate availability of petroleum. Its strategic reserves currently exceed 5.3 million metric tons, and work is underway to create additional reserves of 6.5 million metric tons. He said that the inherent strength of India’s economic foundation… has provided a lot of support to the country during this period. He further said that adequate arrangements have been made for the supply of fertilizers for the summer sowing season starting in June-July and also for the supply of coal to meet the increasing demand for electricity as the temperature rises. The South Asian country, the world’s most populous and fastest-growing major economy, still depends on coal for three-quarters of its electricity generation, even as it is increasing production of renewable energy at a record pace.
What can be the pace of GDP?
The National Statistical Office had said last month that the Indian economy is expected to grow at the rate of 7.6% in the financial year ending March 2026. It is expected to grow between 7% to 7.4% in the financial year 2027. Analysts say the prolonged crisis in the Gulf region could significantly slow India’s economic growth in fiscal 2027 due to rising energy costs and supply chain disruptions. During talks with Iranian President Masoud Pejeshkian on Saturday, Modi had stressed how important it was to ensure that sea lanes remain open and safe despite war. India is striking a difficult balance in this war. It has historical cultural ties with Iran, strong and strategic ties with Israel, and deep friendship with Arab countries. It has repeatedly called for dialogue and diplomacy to resolve the conflict.