The three Fs that Sitharaman flagged as India braces for a widening global oil shock, forex strain
Speaking at an event in Mumbai, Sitharaman said Prime Minister Narendra Modi’s recent call to save fuel and foreign exchange and avoid discretionary imports such as gold should be seen in the context of managing external economic stress.
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“It is very important that the Prime Minister calls for preserving foreign exchange as much as possible,” he said, adding that the emphasis on 3Fs reflected the broader challenge facing the economy.
These statements come as India continues to feel the impact of rising crude oil prices and supply disruptions following tensions linked to the Strait of Hormuz and the Gulf region. Sitharaman said high prices of crude oil, fertilizer and gold are putting pressure on the external sector.
Fuel prices also increased in India, the world’s third largest importer and consumer of crude oil, as gasoline and diesel prices increased again on Monday. This marks the fourth revision in May, when fuel retailers sought to recoup losses due to global price movements.
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Regarding the MSME sector, Sitharaman urged public sector undertakings to strictly adhere to the 45-day payment window, stating that overdue payments worth around Rs 8.1 lakh crore are currently locked up, affecting liquidity and working capital for small businesses.
He also warned against “fear mongering”, saying India should focus on maintaining confidence in the economy even as it deals with external shocks arising from the West Asian crisis.
