The government has implemented various steps to secure critical industrial inputs, manage energy resources, alleviate input costs, promote trade, boost industrial operations, and maintain macroeconomic stability following disruptions in the supply chain due to the West Asia crisis. Measures include temporary customs duty exemptions on specific petrochemical feedstock, introduction of the Bharat Maritime Insurance Pool RELIEF Scheme, and restoration of RoDTEP benefits to address increased freight and insurance expenses.
Additionally, liquidity support has been extended through the Emergency Credit Line Guarantee Scheme 5.0, while efforts to enhance trade resilience involve expanding Free Trade Agreements (FTAs) and Comprehensive Economic Partnership Agreements (CEPAs). Energy security strategies encompass diversifying crude oil import sources, enhancing strategic partnerships, expanding Strategic Petroleum Reserves, promoting alternative fuels, boosting domestic production of critical energy inputs, and implementing the Coal and Lignite Gasification Scheme.
To optimize energy consumption, demand-side initiatives like encouraging LPG consumers to transition to PNG have been initiated. The government has also ensured a steady supply of fertilizers and essential agricultural inputs through measures such as assured gas supplies, import source diversification, advance procurement, and maintenance of buffer stocks. Geopolitical events in West Asia have globally impacted countries, leading to increased crude oil prices and a rise in India’s crude oil import bill.
Despite these challenges, the average Indian crude oil basket prices have decreased significantly from $114.5 per barrel in April 2026 to $77.6 per barrel in July 2026. The government, along with the Reserve Bank of India (RBI), has announced measures to enhance capital inflows and meet external financing needs, aiming to bolster macroeconomic stability, curb inflationary pressures, and mitigate global energy market disruptions’ impact on the Indian economy.
While global uncertainties persist, early indicators for the first quarter of 2026-27 suggest sustained economic activity and domestic demand momentum. The average Consumer Price Index (CPI) inflation has remained stable at 3.9% during April-June 2026, indicating price stability. The RBI projects real GDP growth at 6.6% and CPI inflation at 5.1% for 2026-27, noting that global commodity price fluctuations and prolonged supply chain disruptions pose challenges to growth and inflation outlooks.
The government has adopted a balanced fiscal approach to maintain macroeconomic stability amid changing circumstances, evaluating the impact of crude oil price fluctuations on fiscal positions and implementing necessary fiscal measures, including adjustments in the Special Additional Excise Duty on petrol and diesel and customs duties on specific imports. The minister highlighted the availability of fiscal buffers like the Economic Stabilisation Fund, offering flexibility to respond to external shocks while adhering to fiscal consolidation goals.
