May 12, 2026
BENGALURU – Prime Minister Narendra Modi has made austerity appeals to Indians, urging them to place “nation first above personal comfort”, and avoid foreign trips, use less fuel and start working from home (WFH) more often.
PM Modi made this request during a public meeting on May 10, after inaugurating infrastructure projects in Secunderabad city in Telangana state. He urged measures to curtail the consumption of petroleum products and foreign exchange reserves, warning of growing economic uncertainty as geopolitical tensions in West Asia pushed up oil and fertiliser prices and strained global supply chains.
“In this time of global crisis, we have to make a resolution keeping duty paramount and fulfil it with complete dedication,” he said. “A big resolution is to use petrol and diesel sparingly.”
He asked citizens to increase their use of public transport and electric vehicles, and revisit Covid-era measures such as WFH arrangements, virtual meetings, avoid non-essential foreign travel for a year, and prioritise local goods.
He said it is the responsibility of all Indians to ensure that “the foreign exchange spent on purchasing petrol-diesel should also be saved by conserving petrol-diesel”.
Analysts say his speech signals the economic fallout India is grappling with amid the West Asia conflict and rising global fuel prices.
While many countries hiked fuel prices to suppress demand since the start of the Iran war, India increased only the prices of commercial petroleum gas, and duties on export of aviation turbine fuel and naphtha to ensure domestic availability, leaving the pump prices for ordinary consumers unchanged. But this may change soon.
“The global oil market is facing the largest disruption in decades. In these extraordinary times, you need to conserve oil. A government can send signals through moral suasion, as it has now. It is likely that a price signal for demand management through a petrol and diesel price hike will come next,” Mr Dharmakirti Joshi, chief economist at global analytics company Crisil, told The Straits Times.
As global crude oil prices surged from around US$70 per barrel to nearly US$126 per barrel in recent weeks, India’s import bill has ballooned. The country imports around 85 per cent of its crude oil needs.
“With the war extending, it doesn’t look like the oil shortage will end soon. So, it is important to conserve oil. The government and oil marketing companies absorbed some of the burden on petrol and diesel till now, and consumers will need to play a role in burden sharing going ahead,” Mr Joshi said.
Defence Minister Rajnath Singh said on May 11 that India has 60 days of crude oil and natural gas reserves and 45 days of petroleum gas.
The rising oil prices, global uncertainty and costlier imports have put the Indian rupee under heavy pressure. It has weakened to near-record low levels, trading around 94.9 rupees against the US dollar as of May 11.
The country’s foreign exchange reserves stand at US$703 billion (S$891.7 billion).
PM Modi asked people to reduce the use of cooking oil, and buy Indian-made products rather than imported goods.
“The PM’s appeal to the nation is a crisis management response to the current account deficit problem due to high crude price and has slightly negative implications for economic growth in fiscal year 2027,” Mr V.K. Vijayakumar, chief investment strategist at Geojit Investments, told Reuters.
“Industries related to the austerity call like petroleum, chemical fertilisers, gold, air travel, hotel and related sectors are impacted,” he added.
Each of the prime minister’s appeals reflects major areas of expense and vulnerabilities in the Indian economy.
To further conserve foreign exchange, Mr Modi said: “The growing culture of weddings abroad, travelling abroad, and vacationing abroad is becoming prevalent among the middle class… During this time of crisis, we should postpone travelling abroad for at least a year.”
Mr Sunil Kumar, the president of the Travel Agents Association of India, said in a statement that the tourism industry “may now experience increased pressure to promote domestic tourism, where margins and revenues are comparatively lower”.
PM Modi also urged people to refrain from the practice of buying gold during festivals for a year, surprising many as the yellow metal is central to weddings, festivals, traditional investment and rural savings.
Gold purchases and foreign travel lead to substantial dollar outflows, adding pressure on India’s current account deficit and foreign exchange reserves.
India also buys more gold than almost any other country in the world, and the metal accounts for 9 per cent of the import bill, only second to crude oil. Every year, India purchases more than 700 tonnes of gold. With domestic gold production at only one to two tonnes annually, it imports more than 90 per cent of its requirements.
In terms of overseas travel, Indians have recently become among the world’s most active tourists – driven by rising incomes and better connectivity. In 2025, a record 32.7 million Indians travelled abroad, up from 30.8 million in 2024. The United Arab Emirates (UAE), Saudi Arabia and Thailand are the top destinations, with 43.5 per cent travelling for leisure and 34 per cent visiting friends and family, according to the Ministry of Tourism.
Reactions on social media to the prime minister’s request ranged from panic and indignation to acquiescence.
Many users like @sharma_views shared videos of PM Modi holding a roadshow in Jamnagar, Gujarat, and in Secunderabad, asking why the leader was using fuel-guzzling SUVs while asking citizens to cut back. Others mocked the PM’s scheduled seven-day overseas visit to the UAE, Sweden, the Netherlands, Norway and Italy that begins on Friday, days after telling the public to avoid foreign travel for a year.
“These are not words of counsel; they are proofs of failure,” Congress leader Rahul Gandhi wrote on X.
The stock market fell after PM Modi’s message. Jewellery stocks were most impacted, with shares of Titan and Kalyan Jewellers dropping as much as 11 per cent as investors were worried that consumers could cut back on discretionary gold purchases.
Other than gold and fuel, a weaker rupee could also make import-dependent products like electronics, medicines, chemicals, machinery, fertilisers, edible oils, and even airline tickets, more expensive.
These could further fuel inflation, which rose from 3.4 per cent to 3.8 per cent in April. Analysts predicted it could worsen to 4 per cent as a lower-than-usual monsoon and the West Asia crisis push up food prices.
These austerity requests come after elections in key Indian states – a likely strategic move to avoid political fallout from acknowledging the severity of the crisis facing the Modi government. Any measures taken earlier, such as price hikes, could have hurt perceptions of Mr Modi’s Bharatiya Janata Party (BJP) and affected its electoral support.
The BJP won – either on its own or in alliance – three of the five regional elections, whose results were announced on May 4.
The government might hike fuel price any time now, analysts say, reading the signals from the prime minister’s speech.
Anticipating an imminent hike in prices and possible fuel shortage, many Indians have already started lining up at petrol stations across the country.