Prime Minister Narendra Modi on Sunday urged Indians to adopt cost-cutting measures — including avoiding gold purchases, postponing foreign travel and working from home — as the country grapples with the economic fallout of the ongoing Iran-US war and surging crude oil prices.
Addressing a BJP rally in Hyderabad, PM Modi said India must conserve foreign exchange reserves and reduce fuel consumption as global supply chains remain under pressure due to the prolonged conflict in West Asia.
The war has kept the Strait of Hormuz — one of the world’s most critical oil shipping routes — partially disrupted for weeks, triggering fears of prolonged supply shortages.
PM Modi’s appeal came after US President Donald Trump rejected Iran’s latest peace proposals, pushing global crude oil prices above $105 a barrel and intensifying concerns over inflation and energy security worldwide. Iran had proposed transferring part of its enriched uranium stockpile to another country while refusing to dismantle its nuclear facilities – a key US demand.
India, which imports more than 88% of its crude oil requirements, has been hit hard from the spike in global oil prices. The rupee has also weakened sharply against the US dollar in recent weeks.
Why Modi urged people to work from home
Modi said the country must revive habits adopted during the Covid-19 pandemic to reduce fuel consumption and save foreign exchange.
“We developed work from home, virtual meetings, video conferencing and many other methods during Corona. We got habituated to them. The need of the hour is to resume those methods,” Modi said.
He urged citizens to use petrol and diesel sparingly by opting for metro rail services, carpooling and electric vehicles wherever possible.
The prime minister also called for shifting freight transportation to railways to reduce dependence on fuel-intensive road transport.
According to government estimates, India’s fuel import burden has surged sharply since the West Asia conflict escalated earlier this year. Officials warned that continued disruption in the Strait of Hormuz could keep oil prices elevated for months.
Union petroleum minister Hardeep Singh Puri said state-run oil companies are currently absorbing massive losses to shield consumers from fuel price hikes.
PM Modi’s appeal on Gold
Modi also appealed to Indians to avoid buying gold for at least one year, saying gold imports put additional pressure on India’s foreign exchange reserves during a global crisis.
“Gold purchases are another area where foreign exchange is used extensively. In the national interest, we must resolve not to purchase gold for a year,” he said.
India is one of the world’s largest importers of gold, and purchases rise significantly during weddings and festive seasons. Since gold is largely imported, higher demand increases dollar outflow and widens the country’s import bill.
The PM also asked citizens to postpone non-essential foreign travel, overseas vacations and destination weddings for a year to conserve foreign currency.
“The growing culture of weddings abroad, travelling abroad and vacationing abroad is becoming prevalent among the middle class. During this crisis, we should postpone travelling abroad for at least a year,” Modi said.
How the US-Iran war is impacting gold prices
The ongoing US-Iran war has created volatility in global gold prices, with bullion markets reacting sharply to every escalation and ceasefire setback in West Asia.
Typically, gold is considered a “safe haven” asset during geopolitical crises, meaning investors rush to buy it during wars or global uncertainty. However, the current conflict has created a more complicated situation because soaring crude oil prices are also stoking fears of prolonged inflation and higher interest rates globally.
After US President Donald Trump rejected Iran’s latest peace proposal, oil prices surged again as concerns grew over disruptions in the Strait of Hormuz — a key global oil shipping route. Rising oil prices increase inflation risks worldwide, prompting central banks like the US Federal Reserve to keep interest rates elevated for longer.
That, in turn, affects gold negatively because gold does not offer interest or yield. When interest rates remain high, investors often prefer interest-bearing assets such as bonds and fixed-income instruments over bullion.
As a result, despite the war-driven uncertainty, spot gold prices slipped on Monday after crude prices jumped and the US dollar strengthened. Reuters reported that spot gold fell around 0.6% after hopes of an imminent peace deal faded.
Analysts say gold is currently being pulled in two directions:
- Geopolitical tensions and fears of a wider Middle East conflict are increasing safe-haven demand for gold.
- But higher oil prices, inflation concerns and expectations of prolonged high interest rates are limiting gains and causing periodic declines.
For India, rising global gold prices create an additional economic burden because the country imports most of its gold using foreign currency. Higher imports during a period of elevated crude prices widen the trade deficit and increase pressure on India’s forex reserves and the rupee.
That is one of the key reasons Prime Minister Narendra Modi urged citizens to avoid buying gold for a year and reduce non-essential imports amid the ongoing global crisis.
Push for austerity and self-reliance
Apart from fuel conservation and reduced imports, Modi also called for lower edible oil consumption, reduced use of chemical fertilisers and greater adoption of natural farming and swadeshi products.
“We have to save foreign exchange by any means,” he said, adding that citizens should contribute towards making India self-reliant during the global crisis.
The Centre has so far kept petrol and diesel prices largely unchanged despite mounting pressure from global markets. However, officials indicated that fuel retailers may not be able to absorb losses indefinitely if crude prices remain elevated.
Congress attacks Modi over remarks
The Congress criticised Modi’s appeal, accusing the Centre of failing to prepare adequately for the energy crisis.
Congress leader KC Venugopal said the government was pushing the burden onto ordinary citizens instead of ensuring India’s energy security.
“Three months into the Iran-US war and PM Modi is still clueless about ensuring India’s energy security. It is shameless, reckless and downright immoral that the PM is pushing the common citizen into inconvenience,” Venugopal said.
Despite the criticism, Union home minister Amit Shah backed Modi’s appeal, calling it a “visionary roadmap” to make India energy-secure and self-reliant.
