Amid Mideast conflict, Indian finance minister calls for focus on '3Fs' — fuel, fertiliser and forex

Amid escalating tensions in the Gulf, India's Finance Minister Nirmala Sitharaman has called for a strategic focus on "3Fs", fuel, fertilizer, and foreign exchange. This directive underscores Prime Minister Narendra Modi's recent appeal to citizens to conserve foreign exchange, a measure deemed "very important" for navigating the current economic climate.

The government is particularly concerned about the impact of the Gulf crisis, which has led to rising crude oil prices and supply disruptions. India, heavily reliant on imports as the world's third-largest oil consumer, is facing significant external challenges. The rising cost of crude, fertilizers, and gold is straining the nation's finances.

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The prime minister giving a call to conserve foreign exchange, as far as possible, is very important.

In response, fuel prices have seen another increase, marking the fourth hike in May. This move aims to offset some of the losses incurred by oil companies. However, the government anticipates a substantial hit to its revenue, with an estimated one trillion rupees reduction in FY27 due to decreased excise duties on fuel. The situation highlights the delicate balance India must strike between managing energy security and maintaining economic stability.

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The stress on ‘3Fs’, fuel, fertiliser and foreign exchange, should be viewed in this context.