The government has implemented various steps to secure critical industrial inputs, ease input costs, promote trade, support industrial operations, and maintain macroeconomic stability following supply chain disruptions due to the West Asia crisis. Measures include temporary customs duty exemptions on specific petrochemical feedstock and the introduction of the Bharat Maritime Insurance Pool RELIEF Scheme to aid businesses. Additionally, RoDTEP benefits were reinstated to address increased freight, insurance, and war-risk expenses, while liquidity support was extended through the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0.
In response to the crisis, the government is enhancing trade resilience by expanding Free Trade Agreements (FTAs) and Comprehensive Economic Partnership Agreements (CEPAs). Minister of State for Finance, Pankaj Chaudhary, highlighted the government’s efforts to strengthen energy security through strategies like diversifying crude oil import sources, expanding partnerships, increasing Strategic Petroleum Reserves, promoting alternative fuels, and encouraging domestic production of critical energy inputs. Demand-side initiatives, such as promoting the shift from LPG to PNG, aim to optimize energy consumption.
Furthermore, the government has ensured a steady supply of fertilizers and essential agricultural inputs by securing gas supplies, diversifying import sources, advance procurement, and maintaining buffer stocks. The recent geopolitical events in West Asia have had global repercussions, impacting crude-oil-importing emerging economies, including India. Despite the rise in international crude oil prices, India’s average crude oil basket prices have decreased significantly from $114.5 per barrel in April 2026 to $77.6 per barrel in July 2026.
The recent government and Reserve Bank of India (RBI) measures are expected to enhance capital inflows and meet India’s external financing needs, according to Chaudhary. These coordinated actions aim to fortify India’s macroeconomic stability, manage inflationary pressures, and mitigate disruptions in the global energy market. While global uncertainties persist, early indicators for the first quarter of 2026-27 suggest sustained economic activity and domestic demand. Additionally, the average Consumer Price Index (CPI) inflation remained moderate 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. The government has adopted a balanced fiscal approach to ensure stability and resilience amid changing circumstances, closely monitoring the impact of crude oil price fluctuations on fiscal matters. Measures such as adjustments in the Special Additional Excise Duty on petrol and diesel and customs duties on specific imports have been taken to maintain fiscal flexibility.
